Recently, Luke Gelineau of Insured Productions was interviewed by Luke Seerveld regarding the different types of insurance needed by movie equipment rental houses. Since the information is valuable to both rental house owners and their clients, we’ve written up a summary of his interview and given you a link to the video. Additional information on the insurance needed for film equipment from rental houses can be found by following the links next to the interview questions.
Why do we need film equipment insurance? Won’t my homeowner’s policy cover it? (click HERE to see this in the video)
Unfortunately, the answer your homeowner’s policy does not cover your equipment. That type of policy excludes any property used by a business. Your homeowner’s policy provides personal insurance. It is meant to cover those items you use for personal use only. This would include your home, car, and household items.
Vehicles or equipment that you rent out to others falls under the classification of “business equipment” and is no longer being used primarily for personal use. A good way to look at this is that homeowner’s insurance only covers items inside your home. Once it has been rented by your client, it leaves the premises.
Most insurance companies do not understand how the entertainment industry operates and the idea of insuring rented out equipment makes them nervous. It is always best to check with a company, like Insured Productions, which specializes in insuring film equipment rental houses. They understand the types of coverage you need. Make sure you have the required production equipment insurance to avoid any future problems.
For more information, you can read this article on Why Homeowner Insurance Is Not Enough – Spotlight on Production Equipment Insurance
What is the difference between primary and secondary insurance? (click HERE to see this in the video)
The film production carries the primary insurance that covers all the equipment used on the set. If there is loss or damage, then you would file your claim with their insurance. However, in certain circumstances, their insurance company might not pay the claim, or your claim might be larger than the amount of their coverage. In that case, secondary insurance kicks in and pays the difference. Secondary insurance also covers damages to equipment when you are between productions. Film equipment rental houses should have secondary insurance to protect their investments.
What if I forget to ask for an insurance certificate from the producer? (click HERE to see this in the video)
If in the excitement of the shoot you forgot to get a copy of your producer’s insurance certificate, more than likely your secondary insurance will cover your equipment. However, if you make a claim on your insurance policy, you run the risk of having your policy canceled or seeing a significant increase in your rates. The purpose of secondary film equipment rental house insurance is to be “second.” The company that insures your equipment assumes that there is another primary policy in place.
Is a certificate of insurance enough? What else do I need to get before renting out my equipment? (click HERE to see this in the video)
You need a certificate of insurance and a signed rental contract. The rental contract is the document that states that the renter will pay you in the event of a claim. The insurance certificate does not say that. In fact, it states at the top that “the document confers no rights to the holder at all.” You need a signed rental contract to hold them liable.
Film equipment rental houses often think that if they get a certificate that names them additional insured and loss payee, then they are covered. However, if this is all they have, then the insurance company can easily refer to the words at the top of the certificate and point out to them that there is no contract between them and the renter. It’s just a piece of paper that tells somebody that they have insurance coverage, and that’s it.
So what do you do? Film equipment rental houses should ask their clients to sign a rental contract and give them their insurance certificate. The contract should refer to the cert, so that once you have them together, then you have a properly executed legal agreement. If something happens, you can go straight to the insurance company listed on the certificate and start the claims process.
For more information on rental contracts and insurance certificates, read this article Myth & Fact: Insurance Certificates and Rental Contracts.
Why would a client request a rental house’s certificate of insurance? (click HERE to see this in the video)
In the case of negligence on the part of the rental house, a producer may want reassurance that they are covered. It could be that the claim will still fall under the film production’s insurance, but they may wish to know that additional coverage is in place. It also establishes your legitimacy as a company. By showing that you have insurance, you present a more credible appearance.
What types of insurance do film equipment rental houses need? (click HERE to see this in the video)
A gaffer or rental house needs the following types of insurance:
- General liability insurance
- Automobile liability coverage – This is required by law to license and drive your vehicle
- Coverage for your film equipment
It is best if you can provide a list of all your equipment for the insurance company. This helps determine the actual value of your items and how much coverage is needed.
What is the difference between Equipment Insurance and a Producer’s Insurance? (click HERE to see this in the video)
A producer’s package includes all types of insurance for the film production. It covers wardrobe, equipment, vehicles, cast members, and liability issues. There is no need for a film equipment rental house to carry all that coverage. They only need to insure their equipment.
What are the steps for filing an insurance claim? (click HERE to see this in the video)
The claim process is relatively easy. The very first thing you should do is contact your insurance broker. They will gather all the required information and notify your insurance company. Once you’ve spoken to your insurance broker, you should contact the producer’s insurance company and start a claim with them.
If they dispute the claim or drag their feet on issuing payment, your insurance company may step in and take over. Even if your insurance company pays your claim, you are not assuming liability. They will then try to settle and collect from the primary insurance. One of the benefits of having secondary insurance is that they will handle the hassle of settling a disputed claim and you can just move on with your business.
What do you tell a producer who doesn’t have insurance? (click HERE to see this in the video)
This can be a bit sticky. Nobody wants to turn away business. However, it is not in your best interest to rent to someone who does not have insurance. You should request that they get a short-term insurance policy. For very little money, they can get coverage for as short a period as 24 hours. This protects both you and them in the event of accidental damage.
Even when someone presents you with a short-term production insurance policy, there are a couple of things to consider. You want to check the dates of the policy and the coverage amounts. Make sure both are correct. If there is any question in your mind about the policy, contact the agent listed and ask.
For more information on how to get short-term insurance policies for your rental clients, read this article Myth & Fact: Short Term Production Insurance.
Can you borrow someone else’s insurance? (click HERE to see this in the video)
No, this will not work. The name on the insurance certificate must match the person signing the rental contract.
Sometimes another company with production insurance offers to let your client “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.
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?
For more information on why you must have your own insurance policy, read our article Myth & Fact: “Borrowing” Production Insurance.
What is an insurance audit? (click HERE to see this in the video)
Typically, there are two types of insurance audits. The first one takes a look at your gross sales. By collecting these numbers, your insurance company can determine the scope of your business and estimate the amount of risk involved in insuring your equipment.
The second type of insurance audit takes a look at your payroll. To help determine the amount of worker’s comp coverage you need, an insurance company evaluates how much you are paying out to employees. There are instances when this type of audit can result in a refund to your company if you have been overpaying for coverage.
What about the issue of insurance fraud? (click HERE to see this in the video)
Film equipment rental houses often have to deal with fraud. When a client rents your equipment and doesn’t return it, this is a fraud, not theft. Therefore, your insurance policy may not cover the cost of replacing the equipment. You need coverage for illegal conversion.
In a theft situation, burglars or robbers take items without permission. Insurance policies cover theft because negligence does not exist, but policies exclude illegal conversion claims because you freely gave the equipment to the customer at the time of rental. None of it was ever taken against your will.
Make sure that the customer signs a rental agreement and produces a valid insurance certificate. Contact their insurance company and make sure the coverage is valid. Don’t be shy about asking what happens in the event of illegal conversion.
For more information on fraud and theft, read this article titled Myth & Fact: Illegal Conversion Claims and Theft.
Can you insure specialty equipment like drones? (click HERE to see this in the video)
Do not assume your standard rental house policy covers your drones. Ask about drone insurance. There are usually aircraft exclusions on your standard insurance, and a drone is considered aircraft.
Drones are all the rage nowadays, and both the government and insurance companies are scrambling trying to figure out what to do about them. The truth is that drones fall under the classification of UAV, which stands for Unmanned Aerial Vehicle. Any aerial vehicle is classified as an aircraft by an insurance company, regardless of how small and insignificant it might appear.
This means that if your drone falls out of the sky and breaks, your equipment policy does not cover it. If it damages a building, runs into another aircraft, or injures somebody, you cannot make a claim under your General Liability policy. Many insurance companies include the terms “Drone” and “UAV” in their exclusions list to make it even more clear that they are NOT interested in covering your drones.
To cover drones, you need specialized drone insurance or aircraft liability insurance. Find more information on these two types of insurance in these two articles.
What if I have more questions about insurance? (click HERE to see this in the video)
So what can you do if you have more questions about insurance for film equipment rental houses? I’d be happy to provide you with information on any of these topics.
Call or email me, and I’ll help you get the insurance you need.