Colby Spencer: I think everybody got a bit shocked when [film production during the COVID-19 pandemic] shut down but, I don’t know, I think everybody had a forced rest and film is known for being no rest.
Mike Groner: I wish we could say that we got that same rest during the stay-at-home orders but instead, I think we were hit with 45 claims on day one of the orders.
Colby: And generally what kind of claims were those?
Mike: We didn’t see a lot of claims coming from cast and crew getting sick. Most of the claims that we received [during the pandemic] were for a coverage in the entertainment package called civil authority, which in itself is not that unique a coverage. It’s included on most standard business insurance policies. However, the way the coverage reacts is slightly different in the film world. Pre-March 2020, there were no exclusions under the entertainment package policy (specifically for civil authority) for communicable disease.
By April 2020, every film policy had an absolute COVID communicable disease exclusion. Pre-2020, nothing like this had ever happened, so any policy that was purchased prior to March 2020 had coverage for COVID in the form of civil authority coverage. In a nutshell, civil authority coverage gets triggered when a government authority (e.g., police, fire department) doesn’t allow you to gain access to your location as a result of something having nothing to do with the production. So, they essentially revoke your permit or bar access to the location.
During the stay-at-home orders where you couldn’t gather 10, then seven, then three people, how are you going to film? You’ll be breaking the law if you gather your entire cast and crew. So, that’s what triggered all these claims at that time.
By April 2020, we were working to come up with a solution for COVID-related losses because even if productions were able to restart (which they did in June), the chances of someone getting COVID were pretty high, and we still faced the threat of new stay-at-home orders. We didn’t have too many in BC but in Quebec and Ontario, they did impose new stay-at-home orders that would have triggered civil authority had that coverage still been available at that time. So in Canada, they did come out with that Telefilm Canadian Media Fund program, which was designed to put back in coverage for cast and civil authority in the event of a shutdown related to COVID. But in order to qualify for that, you had to be considered Canadian content and not all Canadian projects are.
We were able to come up with a couple of solutions; they were fairly pricey and they didn’t work for every movie but on the larger independents and the TV series, it was a gift to be able to have some protection if you did have another shutdown related to COVID.
Colby: Do you still lose sleep about COVID regarding insurance claims or is this just a new reality that you have adapted to now?
Mike: At this point [March 2023], no one is really insuring against COVID. I think people have become pretty comfortable with the risk and a lot of productions build into their contingency fund to accommodate shutting down for a day or two. So, I don’t live in fear that I’m going to get a call that we have a brand-new claim. But for the first six to eight months [of the pandemic], dealing with the claims that were already submitted, that was one of the most stressful periods of my career, if not the most. Every single one of those claims required a true forensic accounting of productions having to prove what their additional costs are above and beyond the budget. It’s not just “OK, you shut down, each day was $100K, here’s your money!” You have to prove your overages and how much that shutdown really cost you in addition to what you had budgeted.
Colby: Even if you think about launch date, right? Like your promotional and box office misses and all those potential gains you missed because of this delay.
Mike: That part is uninsurable. We only insure the actual production costs. We don’t insure the promotion or delivery of the production.
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Content courtesy of the Vantropolis podcast.
About: Front Row Insurance Brokers Inc. is an independent insurance broker that specializes in the entertainment industry – specifically, the film industry. Front Row works hard to provide insurance protection for a very low cost. Should a claim occur, Front Row works diligently with clients and insurers to expedite the payment.
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