Coronavirus Production Insurance? No Such Thing. Here’s How Hollywood Will Cope

Chris Lindahl
·7 min read

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No one knows when coronavirus will allow film and TV production will start again, but here’s what we might expect when it does: More production assistants, to manage disinfecting and hand sanitizers. Fewer crew members, to reduce the risk of infections. And no new production will be covered for coronavirus via traditional production insurance or completion bonds.

“When you do get back online and people are coming to us with new projects, at the moment, there won’t be any insurance companies that are going to be able to provide any coverage for this,” said Michael Groner of Front Row Insurance Brokers. “Even when the government lets up on the restrictions and we can get back to filming, the chances of there being another wave of outbreaks that potentially would shut down the production are too great for insurance companies to even consider.”

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The exception is for those productions covered by policies written pre-virus, but interrupted by the quarantine: If the insurance policy covered coronavirus before the outbreak, they’ll likely be honored through completion. However, those policies are not designed to cover weeks of quarantine; the limits are around $2 million — up to $5 million, for bigger projects — which for many films or TV shows is perhaps two to five days in daily production costs.

That shifts the burden to the productions, which will have to change their habits as well as their mindsets. Traditionally, calling in sick can be viewed as unprofessional. It’s very difficult for producers to replace a skilled worker on a job in progress without slowing an already-tight schedule, and it can put serious strain on other department members.

Going forward, however, even one sick person could mean quarantine for many. It could even mean a whole production has to shut down, and insurance won’t cover the sunk cost and expense of delays. This will also challenge crew members; for many of them, there’s no such thing as sick days. Pay only happens when you work — and when restrictions lift, working is exactly what they want to do after weeks without pay.

Even before COVID-19, many production insurance policies did not cover pandemics; some companies created exclusions years ago, after the SARS epidemic. However, now that coronavirus is a known threat, Groner likens its coverage to “insuring a house that’s already on fire.”

It’s possible that could change. In the early stages of legislation is a mechanism to create federally backed pandemic risk insurance, a product not unlike the one created after 9/11 to cover terrorist acts — which almost all insurance policies, across all industries, now specifically exclude. Called TRIA, aka the Terrorism Risk Insurance Act, by law insurers must make TRIA coverage available to their policyholders when underwriting a line of business.

However, it’s not clear that there will be a TRIA equivalent for coronavirus or other pandemic coverage. In a letter to President Trump signed by seven Republican senators (and with the backing of the National Association of Insurance Commissioners), they said they were “very skeptical that any such proposal would be able to provide the appropriate coverage at an appropriate price for our nation’s small businesses.” And, simple math might make that the case: The odds of contracting coronavirus are much greater than the chance of encountering terrorism.

“This is hitting every single production at the exact same time, which is not an insurance model,” said Nicole Page, an entertainment attorney and partner at Reavis Page Jump. “[And] It’s not a completion bond model, where there’s an assumption that not everything is going to get hit at the exact same time.”

This likely means productions will have to create their own contingency funds. Shawn Williamson’s Brightlight Pictures currently produces seven shows, including ABC’s “The Good Doctor” and “The Mighty Ducks.” He said that for some of those shows, networks and studios currently cover those costs through insurance claims now in progress. But for Williamson’s indie production division, Lighthouse Pictures — which produces content for Lifetime and Hallmark — things are more complicated.

“They’re shows we created where we are the studio,” he said. “We’re working with (the cable channels) to figure out how to mitigate costs. It’s different than working with ABC or Amazon.”

To mitigate the possibility of delays, many expect a serious paring down of the number of people on set to only key people from each department. The fewer the people, the fewer the chances of infection causing problems.

In Sweden and Denmark — two countries that did not shut down businesses, but instituted rigorous standards for social distancing — their film agencies already have established a new set of norms for all shoots. These include social distancing with leaner crews, departments that can work sequentially, no more than 50 people on set, and no crowd scenes.

In theory, rapid testing for antibodies or the virus would be the gold standard for productions — but only if and when the tests become widely available. However, the World Health Organization has warned there’s no evidence that serological tests can show whether a person has immunity or is no longer at risk of infection. Temperature checks could be a more readily available stopgap.

While new government standards from the Occupational Safety and Health Administration could provide guidance on best practices, inquiries to OSHA only elicited an invitation to email questions to the agency. The emailed inquiries did not receive a response. (According to a recent report in trade publication Business Insurance, there currently is no OSHA standard to comprehensively address employer responsibility to protect workers from infectious diseases.)

“We’re running some scenarios with some of the studios,” said Williamson. “Where we would need to add crews for hair, makeup, and wardrobe, reduce crews on set, adding PAs who would be disinfecting and providing hand sanitizer to the crew on an ongoing basis.”

Production companies also are readying to shoulder the cost of increased competition. The pent-up demand for production is expected to create competitive logjams for everything from sound stages, locations, crew, and post-production houses. That could cause problems for independent producers, who don’t have the resources to offer top dollar.

Williamson, who is based in Vancouver, expects work to ramp up in New York and Los Angeles first, followed by Canadian cities like his and Toronto. And productions may favor staying close to the very biggest production hubs and their enormous crew bases, given the challenges that may come in the face of crew members who might have to be replaced.

“If you’re out there shooting in Montana and one of your grips or gaffers gets sick, how long would it take you to get a replacement?” said attorney Mark Litwak. “In LA, it just takes a number of hours.”

While location can help solve some problems, it can’t do much for situations where key cast members or directors get sick. That’s why Litwak expects game shows, with their rotating cast of contestants, and projects that don’t depend on large crews gathering where work can be done remotely, like documentaries or animation, will have an easier time getting back to work.

Projects that rely on casting may also face a domino effect of production delays, which may demand an unprecedented level of flexibility. Typically, actors are available to shoot only within contractually specified timeframes. But if one job is delayed — due to an unavailability of locations, or someone getting sick — that could infringe on the next project.

Quarantine is in place for Los Angeles until at least May 15, and there’s no official estimate of when productions will resume. Speaking to crew members, some hear June or July is possible; others believe nothing can start rolling until August. Without official announcements, it’s all conjecture — but at some point, Hollywood will have to reckon with shooting in a world that’s been reshaped by coronavirus. When that happens, the best safety nets may be the ones that the industry creates for itself.

Dana Harris-Bridson contributed reporting.

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