Film Finances’ Dan Read addresses the COVID-19 insurance issue
See-Saw Films’ Emile Sherman identifies the worldwide exclusion of COVID-19 from insurance cover as the biggest issue facing the film and television industry – and that’s a problem for completion bond company Film Finances Australasia.
“Insurance allows investors to hold their breath and leap,” says Sherman, whose Netflix-commissioned The Power of the Dog and BBC miniseries The North Water were forced to shutdown.
“With COVID-19 excluded, the wheels of production grind to a halt. We urgently need the government to step up as insurer of last resort until insurers start to price in the COVID risk, which will likely take a while and may be closer to the time a vaccine is discovered.”
Film Finances Australasia CEO Dan Read observed: “Insurance companies won’t cover any COVID-19 related losses, which is a really tricky problem that hasn’t been solved yet.”
In a web session with Screen Producers Australia CEO Matt Deaner last Friday, Read said: “Ultimately we will need to find a solution to this gap in insurance. I’ve seen talk of some government-backed insurance schemes to cover the gap.
“In California and New Zealand, for example, insurance companies won’t cover earthquake damage to houses so governments have stepped in and you can now buy that insurance from the government.”
Producers typically buy insurance cover for the director, the DOP and four or five key cast, in the case of sickness or incapacity, but that now excludes the virus. Read anticipates there will be budget over-runs on some productions which stalled due to the pandemic.
Before Film Finances agrees to bond projects it insists that producers buy insurance with a provision for civil authority cover, which means if a government body orders a production shutdown than can result in claims of $100,000 – $250,000. That could be used to pay for the costs of, say, bringing back an actor or director from overseas.
Asked by Deaner whether productions could proceed without COVID-19 cover, Read said: “It will be a question for the finance companies, the banks and investors as to whether or not they are prepared to take on that risk.
“We would need medical advances in treating the disease to give insurers the comfort to remove the restriction. Hopefully an effective treatment will be found in the next couple of months which means if someone catches the virus, that won’t lead to a panic which causes a shutdown.”
Film Finances has not been able to close contracts for six weeks due to uncertainty over when productions can start or resume.
But Read has been encouraged by a surge of inquiries from producers seeking letters of intent for projects which they are about to submit to Screen Australia or state bodies for funding.
“We’re here, we’re in business and we want to be part of the solution in getting the industry back on track,” he concluded.