Equipment & Production Insurance

A service of United Agencies, Inc

Myth & Fact: Altering an Insurance Certificate

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liability insurance certificateMyth: It’s acceptable for a renter’s insurance certificate to be handwritten or altered.

Fact: It’s NEVER acceptable for a certificate of insurance to be altered by hand or edited in any way!

I encounter a lot of scary practices regarding insurance certificates supplied by people renting from rental houses. Over the years, situations occurred where customers altered their certificate of insurance by writing in their name as “Named Insured.” In other instances, clients attempted to alter the dates on their policy in order to extend the coverage. The most concerning incident involved a client increasing the amount of coverage shown on their insurance certificate.

The possibility exists that they made these alterations in ignorance. Maybe the spelling of the name on the certificate of insurance was wrong. It does not seem like a big deal to correct it without asking for a printed copy of a revised certificate. Or perhaps they really did increase their coverage amounts or extend their effective dates, but they thought they could just write in these changes instead of getting a new copy.

Unfortunately, that is not the way it works.

What is a Certificate of Insurance?

A certificate of insurance is the official document issued by an insurance company or broker that verifies the insured party, the amount of coverage, and coverage dates.

It acts in conjunction with the contract between the insurance company and the insured. If the document shows alterations that don’t match the contract held by the insurance company, they hold no liability. You could find yourself without proper coverage because the certificate is NOT the contract.

You need to obtain an accurate copy of an insurance company, printed by that company.

What to Do if You Hold an Altered Insurance Certificate

If you are afraid that a certificate of insurance may not be legal, do NOT be afraid to contact the agent. Many times it is only an innocent mistake on the part of the client. However, you definitely want to make sure before doing business with them.

Don’t worry about “bugging” us or taking up our time. We appreciate it when you ask about the insurance certificates issued by our clients. You are doing all of us a favor by letting us know that the certificate has modifications. Trust me, none of us wants to get caught in a situation without legal coverage. Like I said, the handwritten modifications don’t satisfy legal requirements but we can easily print an updated document. If the edits to the certificate aren’t valid, you definitely want to know.

Just make a quick phone call to verify coverage and clear up any potential problems before the damage occurs.

Client-Issued Certificates of Insurance

Sometimes clients will have the ability to issue certificates of insurance themselves through a website or online portal. In that case, the agent and the insurance company see a list of the certificates that they issue. We control the dates and coverages shown on the certificate, and they don’t own the ability to change them.

Unfortunately, some clients think since they issued their own insurance certificates, they can change them, but that is not how it works.

Please call if you have any question regarding insurance certificates. The rules and regulations can be a bit confusing, but I’m always happy to help explain the ins and outs of insurance coverage.

Myth & Fact: “Borrowing” Production Insurance

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clapperboard being snapped before film productionMyth: 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 Insured Productions explains borrowing production insurance

Luke Gelineau

Myth & Fact: General Liability – Movie Insurance

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Operator holding clapperboard during the production of short film outdoor in the night with sportive yellow car and actor on stage. Focus on the clapperboard and monitorsI get calls from people all the time that go something like this: “Hey Luke, I’m doing a short film, and just want a policy to cover injuries to my cast/crew and damage to my set, so I just need a policy for $1,000,000 of General Liability”.

I always say the same thing:  “That sounds great… except General Liability actually, doesn’t cover either of those things!”

Myth: General Liability Insurance is film insurance that covers injuries to my employees and damage to my locations.

Fact: General Liability Insurance covers neither of those things!

So what does it cover? General Liability – Movie Insurance insures you for Bodily Injury and Property Damage TO THIRD PARTIES. Those last three words are important! Liability film insurance only covers injuries to people that you are not working with, and locations where you are not filming. So how does that work? Say somebody is walking by your set, and they trip and fall on an extension cord,  and they break their leg. They decide to sue you for damages. That would be a General Liability claim because they are a third party to you. They have no part in your film production. They were just going about their day when something happened to them.

The same goes for the location, as well. If you are filming somewhere and you have a light set-up to shine through a window. Then, that light falls backward and breaks the window of the building next door. That is a General Liability claim. You weren’t filming at the building next door, but they were adversely affected by your filming operations. So, your Liability coverage would extend to them.

What Types of Movie Insurance Do You Need?

Even though Liability coverage might not sound very helpful to you, it’s still important to people with whom you’re working. Your rental houses and locations are all going to require it because they don’t want this person who tripped or the building next door to drag them into a lawsuit. So, they make sure that you add them as additional insured to your Liability policy. Adding them keeps them covered under your insurance, and safe from anybody who might see them as the “deep pockets” and try to drag them into court.

So how do you get coverage for injuries to your employees and damage to your locations?

Those types of insurance are called Workers Compensation and Third Party Property Damage, respectively. You can learn more about those types of movie production insurance elsewhere on our website. Or better yet, why not give me a call? I’m always happy to explain all of this confusing insurance stuff!

 

Luke Gelineau United Agencies explains General Liability and Movie Insurance

Luke Gelineau

Myth & Fact: Drones & Aircraft Liability

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drone used in film productionMyth: Drones do not count as “Aircraft,” so my insurance policy covers any damage they might cause.

 

Fact: Insurance companies DO classify drones as “Aircraft” and almost all insurance policies exclude aircraft.

Frequently, we get calls from people asking to purchase drone insurance.  These things are everywhere.  You can buy them at technology stores, department stores, and I even saw some for sale at the grocery store.  Nowadays, anyone can purchase a drone and attach a camera to it. So, how does that work with insurance?  Maybe, you’ve checked your policy and noticed that there is an exclusion for “Aircraft.” Great! It isn’t like you are flying a plane or a helicopter or something crazy.  It’s just a glorified toy, right?  No, that is not the case!

The Truth About Unmanned Aerial Vehicles

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, it is excluded by your equipment policy.  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.

What You Need is Aircraft Liability Insurance

The coverage you need is called Aircraft Liability.  Aircraft Liability Insurance covers any damage or injuries that your drone might accidentally cause to a third party.  We can even write a policy to cover the drone itself, or any equipment that you might attach to it.  

Maybe you aren’t interested in covering damage to your drone since most drones are so inexpensive. However, Aircraft Liability is a BIG deal if you fly a drone.  When you provide your standard general liability coverage to a location or a city for a film permit, they expect you to have the proper coverages in place for your shoot.  If your drone hurts someone and you don’t have the appropriate coverage, you are not only subject to paying for those damages out of pocket, but you might get a hefty fine from the city for not properly covering yourself.

Drone Insurance for Your Film Production

So what can you do?!  Give us a call to talk about drone insurance.  There are lots of insurance options out there to cover damage to your drone and any damage your drone might cause.  We can write a low-cost policy for you within a few days, and you don’t even need to have your Part 107 or 333 Exemption from the FAA.  If you have either of those, that will help, but they are not required.

Call or email me with any questions, and DON’T FLY UNINSURED!

Luke Gelineau Insured Productions explains aircraft liability drone insurance uav insurance

Luke Gelineau

Myth & Fact: Workers’ Compensation and Your Film Production

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videographer behind movie camera filming a production

Myth: I don’t need to cover my independent contractors with Workers’ Compensation Insurance.

Fact: ANYBODY who works for you is required by law to be covered by Workers’ Compensation.

We’ve heard every excuse when it comes to Workers’ Comp:

  • “It’s too expensive!”
  • “My employees sign waivers, so they don’t need coverage.”
  • “I’m only shooting for a couple of hours!”

However, the excuse that we hear the most, BY FAR,  in the entertainment and production industry is this one:

  • “I don’t need Workers’ Compensation Insurance because I use independent contractors.”

Workers’ Compensation – It Is the Law!

Look, I understand the confusion.  I really do.  If they just work for you for a few hours or a few days, and you give them a 1099 as an independent contractor, they’re not really your employee, right?  I mean, the word “independent” is right there in the title, so you shouldn’t have to cover them, right?  Wrong!

Anybody who works for you, whether they’re an independent contractor, volunteer, intern, part-time employee or full-time employee, are required by most state’s law (including California) to have Workers’ Compensation coverage.  It also doesn’t matter how you pay them.  Pay them in cash, check, a payroll service, or don’t even pay them at all, they still need coverage under a  Workers’ Comp policy.

The Risks of Not Purchasing Workers’ Comp Coverage

So what happens if you don’t buy the coverage?  Well, we’re not going to rat you out to the state or anything. We’ll even sell you a Short Term Production Policy or Annual Production Policy without the coverage if you want. However, if anything happens to one of your employees and you do not have Workers’ Comp, then you run the risk of them taking you to court. If that happens, you can bet you will lose.

It won’t even be close.

The law requires you to purchase the coverage, so if you’re found involved in a claim without a valid Workers’ Compensation policy then you’ll pay for the hospital and rehab bills out of your own pocket. You even risk getting a fine from the state for hiring employees without Workers’ Compensation Insurance.

There are NO Loopholes!

Don’t think you can have your employees sign waivers, either.  There are only a select few states that allow Workers’ Comp waivers to be signed so that the employee can legally opt out of the Workers’ Comp coverage.  However, most production-heavy states do not offer this option (California, New York, Georgia, etc.) and they are only valid if offered by the insurance company directly.  If you write up your own waiver and hope the insurance company and/or state government will honor it, you’re wrong.

It’s definitely in your best interest to get Workers’ Comp.  If you’re reading this right now and thinking “Hey, I’ve hired a few guys recently and had no idea, they needed Workers’ Comp,” then consider this your wake-up call!

(This article was originally published in 2016 and has been updated with new information.)

Call Equipment & Production Insurance

If you need more information on Luke Gelineau United Agencies Welcomes you to the Equipment & Production Insurance website.Workers’ Compensation Insurance then give us a call. Here at Equipment and Production Insurance, we want to help you see your business succeed.

Call us today with any questions you have, and let us help you choose the insurance that is right for you.