Allianz film insurance

During the making of a film several unexpected events may hinder or outright jeopardize the finishing of the movie or burden the budget with surplus expenses.

filmhu: As evident from its campaign, Allianz Hungária is focusing on the film insurance market.

Bence Ötvös: Film insurance has been among the services of Allianz and its predecessor since the eighties. In the case of our current product package we have adapted the international practice for the local legal framework. Allianz’s American sister company, Fireman’s Fund, is among the biggest providers of film insurance in the world. Owing to EU regulations,  however, – put simply: any risk incurred in the EU only an European based company can insure – they needed a European partner, so in the region we began doing film insurance.
Meanwhile, due to the film law and the 20% tax break a film boom occurred in Hungary, thus it is reasonable to focus more on productions shot locally as well.

filmhu:Which productions are your primary target? Local films or co-productions and foreign films shot in Hungary with local service work?

B.Ö.: Our main focus is on foreign productions and co-productions. At the same time we would deem it terrific to be able to step beyond these. Hence we are encouraging Hungarian filmmakers too to insure their productions.

filmhu:Local productions are traditionally under-insured...

Bence Ötvös

B.Ö.: I would go as far as saying they are completely non-insured. Hungarian productions are generally made on a low budget that does not allow for insurance fees, so producers opt to take the risk, or rather – from their point of view – they need to take the risk. On the other hand, insurance fees are not calculated into the budget in the first place. I hope that this practice with time will give way to doing the sensible thing and include insurance in the budget. As this is a basic precondition of co-productions, this might have an influence on local productions as well.

filmhu:What does a film insurance package consist of?

Katalin Kerekes: As different events involve different loss risks, film insurance is modular, its panels can be altered to accommodate different production environments. It ranges from property insurance through accident insurance to production finish guarantee. As a novelty in the local practice in liability insurance we have included damages connected to environmental pollution. This is crucial as producers tend to overlook expenses incurred from such damaging, although massive amounts need to be paid if anything like this occurs.

filmhu:Is it worth to think about signing such a liability insurance for pollution for the backlot behind the studio?

K.K.:  By all means, as environmental laws state that all liability for environmental damages is widespread. Within the framework of the Allianz film production insurance civil law is applicable, meaning that all damages caused to a third party is covered, for instance soil pollution in adjacent properties.

filmhu: Generally, what losses are insured by film productions?

K.K.: Internationally, it depends on the size of the production. In Hungary mostly production expenses and rented equipment are insured, like cameras, props, negatives.

filmhu: On average what percentage is insurance in the overall budget of a production?

B.Ö.: Approximately one and a half percent.

K.K.: This includes cast insurance – that of all principal actors – but does not include liability insurance. Risk, of course, largely depends on the size and nature of the production. The risks associated with a chamber piece taking place in one room with three principals are not nearly on a par with that of a film with extensive locations and great sets.

filmhu:What types of claims have been typical recently? How necessary is film insurance, or rather, what are the risks of not using it?

B.Ö.: It’s not so easy to come up with a really interesting case because when we encounter a claim, it is connected to productions insured by us. However, as productions are generally only partly covered, we cannot necessarily provide a real picture. Typically, though, it is the equipment that is injured, a lamp is knocked over, a set is caught in flames – these are the routine claims. 

But let me refer to an interesting international example for a real case that illuminates how an insurance company not only pays for damages, but also contributes to the thorough investigation of a loss with its expertise and experience. What’s more, it may even assume the often significant costs of a claim.

In the seventies original muster copies of an American film went missing during the shooting. Important key scenes were on the missing reels, and the costs of a re-shoot would have been exorbitant. To mitigate the claim, the insurance company of the production contacted one of the best laboratory expert to make negative duplicates off a found positive for the post-production. All this for the cost of expensive trips to Rome and a hefty fee for the experts.  The results nevertheless failed to impress the director.

Meanwhile, the insurance company had hired an investigator to track down the missing reels – to no avail. As it later turned out, the lost material had been lying in a canvas bag all the time in a warehouse on the lot. Whether they were left there out of negligence or on purpose has never been found out. The insurance company in the end did not have to pay for the losses incurred because of the missing negatives as they were found in the end. But the experts’ , the investigators’ and consultants’ fees, all the expenses appropriated for the tracking down of the lost material, i.e. for mitigating the losses of the production, were paid for by the insurance company.