Equipment & Production Insurance

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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.

 

Myth & Fact: Third Party Property Damage & General Liability

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movie camera used during film production 

Myth: General Liability Insurance covers damage done to my locations during filming.

 

 

Fact: Damage to your locations is NOT covered by general liability insurance. Instead, it falls under Third Party Property Damage.

 

Over the years, I’ve heard a lot of statements from my customers just like this:

“I’m really only concerned about damage to my locations. So, can you write up a General Liability policy? That way they will be covered.”

I always have to break the news to them that General Liability does NOT cover damage to their locations. What they really need is Third Party Property Damage Insurance.

What is Third Party Property Damage Insurance?

Third Party Property Damage covers damage done to locations over which you have the care, custody, or control. For example, if somebody is letting you film in their house, restaurant, or studio, they have given care over to you. Once you have custody and control, you assume the responsibility for any damage.

From my previous blog on General Liability Insurance, you know that it covers damage to third party sites. The difference is subtle, but once you take control of a location, it’s no longer a third party. The building next door to your location would be a third party and covered by General Liability. The locations upstairs or downstairs from you would also be covered by General Liability. However, the actual location where you are filming is NOT covered by General Liability.

Why do locations ask for General Liability if it doesn’t cover damage to their property?

Well, there’s a couple reasons for that.

First, they ask for it because they need coverage for any General Liability claims brought to them because of your filming operations. If somebody is walking by their location and they tripped and fell on an extension cord, they could sue the location themselves for allowing you to film there. Your General Liability coverage would extend to them in this case. If you set up a light outside their window and it falls backward and damages the building next door, that building owner might go after your location owner for damages. It is very important that you provide General Liability coverage for your location.

The second reason that locations ask for General Liability is misinformation. They ask for it because they think it covers their property. The person who owns the home where you’re filming is obviously not an insurance expert, so they just ask for the most popular type of insurance coverage. Most of them mistakenly think that it’s what they need to cover damage to their house.

It’s up to you as the carrier of the insurance to be clear that the policy you’re providing does not cover damage to their location. They might ask that you add the coverage, which you can. The cost is actually very small. Once you do, sit back and rest easy knowing you own the proper coverage.

Call me and let me show you how you can add Third Party Property Damage to your General Liability policy.

Luke Gelineau Insured Productions explains third party property damage

Luke Gelineau

Myth & Fact: Insurance Certificates and Rental Contracts

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Myth: If I’m renting my equipment to someone, it’s OK to just get a certificate. I don’t need to get signed rental contracts.movie cameras

Fact: If you rent your equipment, you must require the renter to give you a certificate AND to sign your rental contract.

The type of document that an insurance agency issues more than anything else is a certificate. Our agency outputs tens of thousands of them per month, and the reason for that is simple: Certificates prove to other people that you have insurance. Let’s face it: Nobody would buy insurance from us just because they want to. The main reason that many people purchase insurance is that somebody requires it of them. If you need production insurance, the likely reason is that you are renting equipment, pulling a film permit, or securing a location. The most common reason that clients ask me for certificates is for equipment rental, but that’s where things get complicated. You also need rental contracts.

The Problem with Insurance Certificates

You see, a certificate doesn’t DO anything for the person to whom you give it. At the top of every standard ACORD certificate issued in this country, it states in big, bold letters:

“This certificate is issued as a matter of information only and confers no rights upon the certificate holder.”

The document goes on to state that it does not extend or alter coverage in any way and that it does not constitute a contract between the holder and the insured. Many rental houses do not understand this. They think that if they get a certificate that names them additional insured and loss payee, then they are completely 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.

The Solution is a Certificate AND Rental Contracts

So what do you do? You require that your renter also signs a rental contract. Most rental houses already have rental contracts, but they don’t always require the person renting to sign them. If you are renting out to anybody, you must demand that they sign the contract and give them the certificate. That then references the contract, and the contract refers to the cert, so 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.

If you are a renter with questions of how to get proper certificates, or if you are a rental house with questions of what else you might need to request from your renter, feel free to contact us at Equipment and Production Insurance and we can help you out!

 

Myth & Fact: Short-Term Production Insurance

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Myth: Short-term production insurance policies are either invalid or offer insufficient coverage.

Fact: Short-term production insurance policies are the same as any annual policy, only for a shorter duration.

The product I sell more of than any other is the short-term production policy. This type of policy is fast, inexpensive, and offers great coverage for short-term shoots where a client needs insurance. However, I answer many concerns held by rental houses who fear deficiencies in the short-term policies they are given. More often than not, they have problems with the limits of coverage provided, or they are concerned that the policy itself is cut-rate and illegitimate.

These are two valid concerns because there are many cheap and cut-rate short-term policies out there. However, if you are a rental house, you can protect yourself. Just make sure you double check these three things anytime you are handed a short-term insurance certificate.

#1 – Check the Dates on the Insurance Certificate

The biggest and most obvious difference between an annual policy and a short-term policy is the coverage period. Short-Term policies can run for as little as one day, so you need to make sure your renter is adequately covered during the entire rental period.

Not only do you need to check the dates, you also should consider the timing. If they hand you a certificate that says they are covered from 2/5/2020 until 2/15/2020, that means they are covered from 12:01 AM on February 5th until 12:01 AM on February 15th. In other words, they are NOT covered on the 15th. Just because that date is shown on the certificate, it does NOT mean that you have coverage on that date.

You need to make sure that every rental is picked up and returned within the dates shown on the certificate. Even if they tell you that they don’t plan to film with your equipment until the policy starts, you need to insist that they add the proper dates of coverage.

#2 – Check the Coverage Amounts

There is no reason that a short-term policy cannot cover everything you require. You can demand the same coverages for General Liability, Rented Equipment, Auto, etc. that you do from any client with an annual policy. If you tell your renter they need to add a missing coverage, and they try to tell you that they can’t – they are either lying or they have a bad policy.

Every legitimate short-term insurance policy can include all the required coverages without any issues. It may cost the client extra money, but that’s the price they have to pay for making high-end rentals.

#3 – Contact the Agent that Issued the Short-Term Production Insurance

There are some short-term policies out there that do not come from an agent. That is a problem. If you have questions about the coverage, or if you wish to file a claim, you won’t be able to call anyone. Make sure that the certs you receive have a phone number for the issuing agent. That way you can contact them to verify coverage limits or deductible amounts.

The last thing you want to find out when you have a claim is that your renter bought a two-bit policy from an online-only insurance provider. What will you do when you need answers to your claim questions or inquiries?

There are, of course, many other things you should be doing to clear your renters before you give your equipment to them. However, these three steps are a great start to making sure that your equipment and your business are properly covered.

Feel free to call us with any questions about purchasing a short-term policy, or renting to people who carry them.

 

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.