Insuring the Movie, the Script and the Robotic Camera Arm

This episode is a change of pace: instead of insurtech, Gilad talked with Daniel R’bibo about a subject close to InsurTechLA’s heart, the entertainment industry. Daniel is an Area Senior Vice President at Arthur J. Gallagher and has spent more than 18 years in entertainment insurance. He began his career in 2000 as an IT administrator at Aon, until a senior colleague (who is now a managing director at Gallagher) invited him to learn the insurance business, and he moved into entertainment insurance in 2002. In 2011 he joined Liberty Company Insurance Brokers to build its entertainment division, later overseeing an acquisition and offices in New Mexico and Louisiana, and was named a Power Broker in the Media and Entertainment category and one of Risk and Insurance magazine’s Top 40 Under 40 that same year.

About Daniel R’bibo

Daniel R’bibo is an Area SVP at Arthur J. Gallagher focused on entertainment insurance for independent film producers through large studios, across lines from production policies to E&O, D&O and cyber coverages.

What Entertainment Insurance Covers

Entertainment insurance covers filmed and live entertainment: movies, TV shows, commercials (from 30-second spots to $500 million studio projects), Broadway and theatrical shows, concerts and tours. For film and TV, it insures the production process, including the physical filmmaking and the content itself. For live theatrical there are additional exposures, such as lost revenue if a venue burns down or someone is injured and performances are canceled.

Insuring the Idea

Gilad was curious about insuring a script. Daniel explained with an example: someone pitches a movie idea at a bar, the producer passes, and a year later makes a movie about spaceships and aliens, and the person sues over a stolen idea. Title infringement and copyright claims are real risks, as are releases: a reality show that films someone in the background without their permission, or an advertiser using a viral video with music the musician never licensed. Errors and omissions (E&O) coverage protects against those claims, and specialized lawyers handle title reports and clearances, working closely with producers to minimize the risk.

The Production Package

The primary policy is the production package, a niche policy that covers cast, props, sets, wardrobe, equipment, third-party property damage at rented locations, and extra expense if production is shut down. It also covers civil authority, and a government shutdown order alone, with no physical damage required, triggers coverage, which is why many insurers were hit by COVID claims in March 2020.

COVID and the Film Business

Underwriters now ask many questions about where a production is filming, for how long, and who the principal cast are, since COVID affects older people worse, and new policies carry COVID exclusions. The longer a shoot, the more exposure for insurers: principal photography may be one to two months, and each stoppage stretches it.

After a six-month pause, there was a rush to restart in November and December, since streaming audiences were running out of episodes. Budgets rose sharply. Insurance alone went from about 1 percent of a budget to 1.75 to 2 percent or more for movies above $5 million, and smaller films have a harder time finding quotes. Add PPE, testing every few days and a COVID safety officer, and Daniel estimated total budgets rising 10 to 20 percent. A single crew member who breaks protocol, such as in the widely reported incident on a major film set, can infect a large crew and shut everything down, and productions are isolating themselves, for example by taking over a hotel in a small town outside Manhattan.

Who Underwrites

Daniel named the handful of US carriers in the space: Allianz, Chubb (once a big writer, now very conservative), Hiscox, ProSight and OneBeacon. It is a relationship business: a broker and underwriter need to trust each other so the broker represents the film accurately (a romantic comedy, not Rambo part 21), and the client benefits from a good claims record. His Puerto Rico example: with only one insurer willing to write a production package there, the quote came in at double the client’s budget, and by raising deductibles the underwriter lowered the price to a workable number. The client sees the final price, but not the 20 calls and negotiations behind it.

Where Technology Fits (and Doesn’t)

Gilad asked where insurtech could help. Daniel’s answer: entertainment is so specialized that most applications go through a broker, who fills them out for the client. Underwriters use different systems, so he emails each insurer separately. An automated send-to-all button would be nice, but the real work is still completing the application. He doesn’t think it will become like shopping for auto insurance online.

He shared some unusual risks: a commercial with kids using a robotic arm that swings a camera around (“what happens if the arm breaks?” and they changed the camera), skydiving shoots, and a war movie with vintage aircraft. Often the answer is post-production: put someone on a wire in a sound stage and add effects, which makes the risk, price and terms much better, and underwriters ask whether a stunt is real or done in post.

Key Takeaways

• Entertainment insurance covers film, TV, commercials, theater and tours, and the production package is the core policy.
• E&O coverage protects against claims of stolen ideas, title infringement and missing releases, with lawyers clearing rights.
• Civil authority coverage, which needs only a government shutdown and no physical damage, drove many COVID claims.
• COVID raised insurance from about 1 percent of a film budget to 1.75 to 2 percent, and total budgets rose 10 to 20 percent with safety costs.
• Only a handful of US carriers write the business, and the broker-underwriter relationship drives outcomes.
• The niche is too specialized and relationship-driven to automate easily; effects in post-production reduce risk.