BY:Steven Beer, Jake Levy & Neil Rosini
This Q&A was originally published in the Fall 2017 issue of Documentary magazine, a publication of the International Documentary Association, a nonprofit media arts organization based in Los Angeles.
The cost of the policy will depend on a number of factors including the riskiness of the subject matter, the size of the deductible (a higher deductible reduces the insurer’s risk, and accordingly, the price of the policy), and the monetary limits of the policy. A $1 million per claim policy ordinarily will cost less – if other variables are held constant – than a $3 million per claim policy. As with most forms of insurance, the policy being offered with the lowest deductible and the highest policy limit is the most desirable from a coverage standpoint. However, the cost may be prohibitive compared to a policy with a higher deductible and lower policy limit.
A typical distribution agreement will require minimum coverage on an occurrence basis of no less than $1,000,000 per claim and $3,000,000 in the aggregate with a deductible of no more than $25,000, with a 3-year term. It’s usually the producer’s obligation to pay the insurance premium, but it’s not uncommon for the distribution company to advance this cost and then recoup it. The premium for that typical insurance policy will be $2,500 or more depending on factors like the content of the film (investigative reporting, for example, generally presents more risk), and the amount of material being used without an express license from third parties who may claim to own it.