Lack of Insurance Threatens Supply of Hollywood Films, TV Shows in 2021
July 9, 2020
NEW YORK — Insurers have largely stopped covering independent film and television productions against the risk of COVID-19 illness, a shift that threatens the supply of new entertainment in 2021, Hollywood producers, insurers and industry experts said.
Thousands of shoots around the world shut down abruptly in March as the novel coronavirus spread and governments imposed lockdowns.
Now as filmmakers try to get back to work they are finding insurers have largely stopped providing the COVID-19 coverage they need to secure financing.
Some insurers are even adding exclusions for COVID-19 or communicable diseases to existing policies when cast members get medical exams, insurance lawyer Kirk Pasich told Reuters.
Without coverage, many producers cannot get the completion bond, or guarantee, that banks require to lend to productions.
Until crews can work safely again and insurance covers COVID-related costs, “there will be less content of the caliber that we’re used to,” independent film producer Robert Salerno told Reuters.
Insurers, already reeling from other pandemic claims, say they cannot offer the coverage because it is unclear how the pandemic will play out.
Although some countries have controlled or eliminated the virus, cases have resurged elsewhere, including the United States.
“It is not a risk you can even price,” a senior insurance executive, who was not authorized to speak publicly, told Reuters.
Projects costing $1 million or less can be financed with cash, but still face health risks, especially for plots with romance or fight scenes.
“So you need to shoot two people in a room, two people talking outside on a bench,” Chartier said. “Not exactly the most exciting movie.”
Independent producers are also looking for private investors to provide insurance, or moving to countries that have government backing for pandemic risk, said Brian O’Shea, chief executive of The Exchange, a movie sales, financing and production company. He hopes the U.S. will provide similar support.
O’Shea sold two movies – one starring Bruce Willis and the other Olivia Munn – last month at “virtual Cannes,” an online version of the famous Côte d’Azur film festival.
With $10 million in financial commitments for each film, he wants to shoot this year, and says government backing would help.
“Now I need to find a bond company and insurance or an equity investor that will guarantee the delivery of the picture given the risks caused by COVID,” he said.
“We’re trying to figure it out.”
(Reporting by Alwyn Scott; Additional reporting by Suzanne Barlyn; Editing by Lauren Tara LaCapra and Diane Craft)
This article originally appeared in Reuters on July 9, 2020 and can be found here.