MOTION PICTURE PRODUCTION STUDIOS

Category: Media

SIC CODE: 7812 Motion Picture and Video Tape Production

NAICS CODE: 512110 Motion Picture and Video Production

Suggested ISO General Liability Code: 98092

Suggested Workers Compensation Code: 7610

Description of operations: Motion picture production studios develop audio/visual films from an initial project proposal through final distribution. Customers may initiate the project proposal by purchasing screen rights to existing stories, books or plays or conceived entirely by the studio. The filmmaker may specialize in movie production for major commercial studios, independent film production, television production, commercials, or video recording services. Movies may be produced at facilities owned by the studio or on location at premises rented from others. The studio may have a commissary or temporary boarding facilities. The five production phases are development, pre-production, production, post-production, and distribution. A studio may perform all processes or use independent contractors.

The development phase turns a project idea into a viable script or screenplay. Financial backing may be solicited if the project is for a major motion picture. Pre-production includes planning how the film will be produced scene by scene, budgeting, purchasing insurance, building or locating sets, and hiring staff, including actors and film crew. If shooting is away from the studio, permits may be required prior to filming and additional security lined up. During production, the movie is created, either with traditional film or digitally. If the movie is animated, graphic designers produce each frame for filming. Each day's filming is reviewed for potential scheduling changes. Post-production processes include assembling the film, editing images, adding special effects if needed, building a soundtrack, and presenting to customers or target audiences for feedback. Once the final version is approved, a master copy is used to produce copies for distribution and release to customers. The distribution includes preparing press kits and trailers, purchasing advertising, scheduling interviews for key cast members, and conducting pre-screenings for the press. Distribution may be limited to theaters, may include streaming services, may be direct-to-DVD, and may be national or international.

Property exposures are limited to an office nature unless shooting is done on premises. If there are studios for shooting film, ignition sources include electrical panels, heating and air conditioning systems, woodworking equipment used for making sets, and flammable adhesives, paints, and solvents. Electrical equipment includes extensive lighting and sound systems. Electrical wiring should meet current codes, be well maintained, and adequate for the occupancy. Flammables should be stored in approved containers. Costumes and production equipment are susceptible to fire, smoke, and water damage. Smoking should be prohibited due to flammable sawdust or fabric dust in the air from cutting and assembly operations. If there is a snack bar, all cooking equipment must be properly protected. Specialized editing equipment, sound stages, high-intensity lighting, cameras, computers, and sound equipment are expensive and may be targeted by thieves. Motion picture studios may be targets for vandalism and malicious mischief. There should be appropriate security controls, including physical barriers to prevent entrance to the premises after hours and an alarm system that reports directly to a central station or the police department.

Business interruption exposures can be high if equipment breaks down or there is a loss. Disaster planning should be done to identify alternative facilities.

Equipment breakdown exposures are high due to the reliance of the production studio on filmmaking equipment. A lengthy breakdown could result in a severe loss, both direct and under time element.

Inland marine exposures include accounts receivable if the production company bills financial backers, audio/visual equipment, computers, film, theatrical property, and valuable papers and records. Audio/visual equipment includes expensive cameras as well as lighting and sound systems needed for production. Theatrical property includes props, sets, costumes, and equipment. All data, including film, should be duplicated and copies kept off site for easy restoration in case of loss. There may be a bailees exposure for items borrowed or rented from others. If the studio takes goods to off-site locations for filmmaking, goods in transit coverage will be needed.

Crime exposure comes from employee dishonesty and theft, including theft of customers’ property and conversion of rental equipment. Background checks, including criminal history, should be conducted on all employees. There must be a separation of duties between persons handling deposits and disbursements and reconciling bank statements. As motion picture studios will have expensive equipment both on and off premises, physical inventories should be routinely conducted.

Premises liability exposures are limited at the production studio as public access is generally confined to designated waiting areas and offices. If the studio conducts production on its premises or offers tours to schools and other organizations, good housekeeping and maintenance are required to prevent injuries such as slips and falls. Floor coverings must be in good condition, with steps and uneven floor surfaces prominently marked. Exits must be sufficient in number, be well marked, and have backup lighting in case of power failure. Temporary boarding facilities for cast and crew should have smoke detectors. There should be a disaster plan for unexpected emergencies. Parking areas and sidewalks should be in good repair and free of ice and snow. The studio may present an attractive nuisance hazard when not in use. There must be adequate security to prevent unauthorized entry by vandals or would-be terrorists. Cast parties and launch parties may include entertainment and serving of liquor. All employees who serve liquor must be trained in recognizing signs of intoxication. A procedure should be in place to deny service to underage or intoxicated visitors.

Off-premises shooting exposures include both bodily injury and property damage. Permits must be obtained as required by law. Signed contracts indicating the scope of filming activities must be obtained from owners when filming on private property. Contracts must be in place that outline the responsibilities of each party, including responsibility for liability exposures while shooting film. Employees may go off site to solicit and market products. There should be procedures as to how they carry out their duties, particularly policies regarding entertainment of financial backers and customers. The use of aerial photography, including drones, animals, boat or vehicle chases, explosives, special effects, stunts, water or underwater work, or weaponry, should be evaluated as coverages from specialty markets may be required.

Publishers and media liability exposures include allegations of advertising injury, assault and battery, breach of confidentiality, breach of contract, copyright infringement, defamation of character, discrimination, failure to verify the authenticity of material, intentional infliction of emotional distress, invasion of privacy, libel or slander, plagiarism, unfair competition, violation of licensing agreements, wrongful detainment, and wrongful eviction from the premises. Contractual agreements should be written and include verification of originality and authenticity of any filmed material.

Automobile exposures are usually limited to hired and non-owned for employees running errands. If the company provides vehicles for officers or salespersons, there should be a written policy on personal and permissive use of the vehicles. Service vehicles may be used to transport cast members or equipment. All drivers must have appropriate licenses and acceptable MVRs. All vehicles should be maintained, and records kept at a central location, including, limousines or courtesy cars provided to stars.

Workers compensation exposures are extensive and can include slips and falls on or off premises, cuts and punctures from making costumes or constructing production sets, electric shock from ungrounded equipment, falling items, work at heights, back injuries from lifting of props or other equipment or working from awkward positions, foreign objects in the eye, hearing impairment from noise, exposure to noxious odors, and contact with the public. Repetitive motion injuries due to computer work can be prevented with ergonomically-designed workstations. Cleaning and maintenance operations can result in lung, eye or skin irritations and reactions. Workers can be injured while in contact with animals or in aircraft, vehicles, or watercraft during filming or while being transported to offsite locations. Contracted talent used during the production phase may be considered employees and subject to workers compensation laws. Contracts must be clear regarding the applicable regulations in the state where production takes place. Additional exposures arise from doing stunts, filming projects overseas, or visiting dangerous or exotic locations.

Cast insurance exposures may be extensive or very limited, depending on the cast and the length of the shoot. Cast insurance provides coverage for the benefit of the production studio when a cast member cannot meet contractual obligations due to injury, disease, or death. The cost of reshooting with replacement casting can be considerable if a project is dependent on a single cast member and the shooting has taken place over an extended period of time. Some insurers will extend coverage to include kidnapping. Ensemble productions and single-day shoots present the least exposure.

Foreign exposures can be high if production moves outside the United States. Extra-territorial property, liability, and workers compensation coverages may be needed.

Minimum recommended coverages:

Business Personal Property, Extra Expense, Equipment Breakdown, Accounts Receivable, Audiovisual Equipment, Computers, Theatrical Property, Valuable Papers and Records, Employee Dishonesty, Active Shooter, General Liability, Employee Benefits, Publishers and Media Liability, Umbrella, Hired and Nonownership Auto Liability, Workers Compensation

Other coverages to consider:

Building, Business Income, Earthquake, Flood, Leasehold Interest, Real Property Legal Liability, Spoilage, Bailees, Goods in Transit, Signs, Kidnap, Ransom and Extortion Coverage, Active Shooter, Cyberliability, Employment-related Practices, Environmental Impairment, Liquor Legal Liability, Business Automobile Liability and Physical Damage, Stop Gap Liability, Aviation Liability, Cast Insurance, Foreign Property, Liability, and Workers Compensation, Repatriation Coverage, Unmanned Aerial Vehicles (UAVs or Drones)