Key selling points for the new policy--which covers commercials, all kinds of TV productions, music videos as well as feature films--are:
- The most significant update in language in film policies in 40 years, and
- Significantly broadened coverage.
"This is a very, very broad policy in its scope of coverage," says Dennis R. Rieff, president of New York-based D.R. Rieff & Associates. "It's very favorable to the industry, giving coverages that heretofore you had to buy separately.
"This is geared toward to production, whether it's film, digital or whatever new format may come up," notes Rieff. "So in that respect it's broader and it changes the definition as to what coverages are in the policy."
Adds John A. Hamby, Los Angeles-based managing director and global entertainment practice leader at Marsh USA: "I think it was time that one of the entertainment markets stepped up and got into the 21st century in terms of policy language and coverage approach.
"Whenever a policy has more clarity in terms of what is covered, and certainly any time there is a broadening of coverage in any respect, that's going to be received well by the client base."
Named its Film Producer's Risk policy, the product was introduced January 1.
In terms of a language overhaul, the efforts were sweeping, says Chubb's Gene Williams, vice president and worldwide entertainment practice leader.
"In terms of insurance policies, things had been so static for so long, probably as long as Chubb has been in the film industry, which is more than 40 years," Williams says.
The main reason for that is that, until George Lucas came along with "Star Wars," for most of the 20th century the technology for making movies had not changed.
But beginning with Lucas's early use of digital technology 30 years ago, there has been a series of advances in filmmaking. "Telecine" machines for converting film to video and "Avid" technology for nonlinear editing have been in wide use for 10 to 15 years. And with the current state of the art, film is scanned to create a "digital intermediate" for editing, then transferred back to film at the end of the process without the need of the original negative. Post-production work is becoming more of a data-processing risk rather than a physical property risk.
Not only was there a need for many new terms in the policy, Williams notes, but there were a lot of relics that no longer applied. "In every film package, there is covereage for negative film and videotape, including a long list of different kinds of film or videotape copies and prints, but some of them were so archaic that most people don't even know what they mean anymore," Williams notes.
For example, in the new policy, out went the traditional term "negative and faulty" and in came "production media," which means any medium or device used to record or store sounds or images.
In terms of broadening coverage, one and all agree this is a greatly sweetened policy.
One sweeping change is that the new policy views principal photography and post-production as one contiguous covered process. Explains Williams: "It may seem obvious today, but one of the things that has changed in the last 10 to 15 years is that post-production often goes on simultaneously with principal photography. So the Film Producer's Risk policy automatically provides the cast coverage and all other production loss coverages through the end of post-production. All clients will have this coverage."
That is a pretty dramatic change, brokers agree.
"From a property point of view, it's a terrific policy," says Dennis Rieff.
Says Williams: "In the past, mechanical breakdown coverage was almost always limited to things like camera equipment and portable generators. In the new policy, production loss resulting from mechanical breakdown applies to virtually any kind of equipment except motor vehicles."
Included in the coverage are any kind of object operated by a computer (such as the shark in "Jaws"), helicopters and boats, among other critical mechanical equipment.
Many traditional exclusions have been removed from the policy, notes Williams. For example, the exclusion for damage to negatives caused by x-ray has always been a worry for insureds who had to transport their film through airport scanners. And, for some productions, the exclusion for extreme temperatures was a concern. Individual exceptions to these exclusions have been granted on a case-by-case basis, but for Chubb those exclusions are now gone.
Another case-by-case issue that has been eliminated is the need to add by endorsement for larger insureds what traditionally has been called cast bereavement coverage.
"Now bereavement coverage is automatically provided to everyone," says Williams.
One prominent broker, who cites Chubb for its superior claims record and top-flight management, sees only one drawback to the new policy--that it might be too broad.
"It's a very, very broad policy in its scope of coverage, and it's my feeling that it's so broad they're going to get hit with some claims they didn't foresee and that they'll have to narrow it down as time goes by," the broker says.
But that obviously is a risk that Chubb, which has offices in 28 countries and insures more than 200 feature films annually, is willing to take.
"We're committed to this business," says Williams firmly.
STEVE YAHN lives in Croton-on-Hudson, N.Y.
February 14, 2008
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