Myth: I can “borrow” my friend’s production insurance policy, as long as he gives me a certificate that names me additional insured.
Fact: It is NOT acceptable, and in some cases illegal, for somebody to let you “borrow” their insurance for a film production.
I hear a lot of reasons from clients about why they do NOT need production insurance. They tell me that their location doesn’t require it. They claim their shoot is too small, or they only plan to work with friends. None of these excuses justify not buying insurance. However, the most upsetting one is when they say they don’t need their own insurance policy because they can “borrow” the insurance from somebody else.
Typically what this means is that another company with production insurance lets them “use” their production insurance. They issue certificates through their policy, and the person borrowing doesn’t pay for their own policy. Sometimes they even charge people for the privilege of extending their coverage to them. The problem with this is that those people are NOT in control of how their insurance works. Just because they are telling you that their insurance extends to you, you receive no such promise from the actual insurance company that provides the coverage.
Production Insurance Only Covers the “Named Insured”
Let’s say that John Smith wants to “borrow” the insurance from ABC Production Company. ABC will tell John that he needs to pay them $300 per day for insurance coverage, and they start issuing certificates on their behalf. They even give a certificate of insurance to John with his name and address on it. This seems like a legitimate practice, but just because they name you as an “additional insured” does not mean that you are covered for ALL claims against you. You are only covered for claims where the Named Insured (ABC Production) is negligent.
So if John dropped a light on the head of a pedestrian, the pedestrian would go after John for the damages. John then pulls out his certificate from ABC. However, ABC’s insurance company then says, “Um…we don’t know John Smith. We don’t have an agreement to pay for his damages or deal with his problems, so we’re going to decline this claim.” John can’t go to ABC for the money because they only agreed to issue the certs. If the claim is declined, that’s not their problem.
Selling A Company’s Services Without Permission is Illegal
This is even more upsetting when companies like ABC Productions charge people for this “service.” They take money from people so that they can “lend out” insurance (which won’t work), and then the insurance company sees no money for the lending out of their product. The practice of selling somebody else’s service against their will and discretion is illegal and can get them into big trouble if somebody finds out.
The only way to ensure coverage as a primary on somebody’s policy is for them to make you a NAMED INSURED. This means that your name is at the top of the certificate, not at the bottom. In this case, the insurance company insures you directly. However, this usually requires some kind of legal merger between you and the production company, which can be hard to pull off.
You Need Your Own Film Production Insurance Policy
At the end of the day, you have to think about this logically. Does it make any sense for the insurance company to have their product rented out for a profit, and not see any of that money? Does it make sense for multiple people to all go under the same policy and for the insurance company to not make a cent? If this practice were legal, then why would anybody ever buy their own policy? Why wouldn’t everyone use one big policy somewhere and pay pennies on the dollar?
I realize that budgets run tight on these small productions, but don’t cut corners and join forces with predatory production companies just to save a little bit of money. Call us as soon as you can if you have any questions about this. We are here if you’re interested in looking at an insurance policy for your next production.
Luke Gelineau
