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    'Buy-Back' Coverage Helping Indies Manage Covid Risks

    Independent film and television productions with budgets between $5M - $15M are finding some protection against future Covid related shutdowns to secure financing in the form of “buy-back” coverage.

    As a result of the multi-billion-dollar pandemic payouts insurance carriers have had and will continue to face, Insurance carriers started excluding Cast Coverage, Civil Authority and Imminent Peril production coverage segments all together or reduced the limits and implemented total Covid/pandemic extra expense policy exclusions*.

    “Today there are 2 options to help fill the gap. Pricing for the “buy-back” coverage mirrors that of contingency pricing for special event “non-appearance” or “event cancellation” coverages, production can look to insure against future Covid/pandemic related business interruptions at limits of $1M to $20M per production with a premium rate running between 6%-12% of the overall limit to be insured,” explains Dominique Butler of NFP. 

    The following highlights the differences in the buy-back options brokered by NFP.


    Coverage Option #1

    Coverage Option #2

    • Illness/Death and Civil Authority
    • Illness/Death, Civil Authority and Imminent Peril
    • 1 to 2 day deductible
    • 48 hr waiting period before coverage response (from the start of a Covid related interruption/shut down) 
    • Coverage against impacted/infected production zones (zones A&B) including declared persons
    • Named/Declared Cast only
    • Full limits for all coverages
    • Illness/Death, Civil Authority and Imminent Peril coverage limit apportionment
    • Can offer 30 to 60 day pre-production start of coverage
    • Coverage goes into effect at the start of principal photography
    • Cast Medicals not required
    • Coverage requires cast medical review and approval
    • Definition of a sickness/illness event does not exclude shut down as a result of a “false positive” test result
    • Covered person has to test “positive” to trigger coverage

    Please refer to the actual quote(s) for specific terms, conditions, limitations, and exclusions. For more information, contact NFP.

    What if I have multiple smaller productions, can I bundle productions into one policy to spread the expense?

    Depending upon the estimated volume and employer of record and workers compensation insurance policy there are options to do this.  Please contact us to discuss your project. 

    What about standard production insurance?

    Productions looking to obtain coverage against future Covid triggered production shut down claims via standard entertainment markets will find it’s just not available in the current marketplace. The only way to obtain such coverage at this time is through one of two firms offering the buy-back coverage. The standard markets have already filed and added the coverage exclusions to new and renewal policies effective July 2020. 

    Coverage needs are not “one size fits all.” 

    Coverage will vary based upon numerous factors specific to the production. An experienced entertainment broker is a production company’s first line of defense when it comes to identifying a project’s exposures and negotiating the best rates, terms and coverage from development to dissemination


    *Covid/Pandemic triggered Extra Expense Covers:

    Cast coverage pays for the extra production expenses incurred as a direct result of the death, injury or sickness of a covered person, which results in the covered person being unable to work and a delay to the production schedule. In the event of a claim, a diagnosis and prognosis from a licensed medical doctor is required in order to verify a sickness. A quarantine without a sickness diagnosis will not trigger cast coverage.

    Civil authority coverage pays for the extra production expenses incurred as a direct result of the action of a civil authority that revokes your permission to use or prevents access to property or facilities used in connection with a production, which results in a delay to the production schedule. There are exclusions under civil and military authority for things like your failure to obtain a permit, your failure to comply with a permit, and revocation of a permit due to the violation of a civil or criminal code.

    Imminent peril coverage pays for the extra production expenses incurred as a direct result of “certain impending danger of such probability and severity to persons or property that it would be unreasonable or unconscionable to ignore,” and which results in a delay to the production schedule. An example would be a production that is filming in an area that becomes a COVID-19 hot spot and has to relocate or shut down.

    This information in this communication is general in nature, and is not intended, nor should it be construed, as legal, accounting, tax or other professional advice rendered by GreenSlate, LLC. The reader should contact his or her attorney, CPA, or tax professional prior to taking any action based upon this information.

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