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April 21, 2017

Are you covered?

Not long ago, I ran across a story about a filmmaker who got caught filming without a permit. Here's what happened.
"He [a fire marshal] essentially said to me, he didn’t care [if I had a permit] so long as I had done something to make the effort, but in good conscience he couldn’t just turn a blind eye. Meanwhile the permit office called around two and rejected my permit, but said I could probably get it for Thursday if I could hold off until then. I told them maybe and that I’d get back to her. We wrapped the location at 4 pm. The next day our production wrapped all together."
As a card-carrying member of the if-something-can-go-wrong-it-will club, I couldn't help but wonder: what if there had been an accident? What if this film shoot didn't have insurance? Who pays?

FilmLA's Contract
Details of the FilmLA contract are described in four previous posts:
  • Part 1: Mitigating the impact of filming
  • Part 2: Reporting obligations
  • Part 3: Permit processing
  • Part 4: Permit terms and conditions
To see the entire 2009 FilmLA contract, click here.
To see the 2014 renewal amendment, click here.
The same questions must have occurred to the LA County attorney who drafted the FilmLA contract. Indemnification requirements occupy a full 7 pages,  nearly 14%,  of the entire document. That's the same page count needed to describe FilmLA's entire Statement of Work.

Here's a few indemnification highlights (if you could call indemnification a highlight) from the FilmLA contract:
  • FilmLA must "indemnify, defend and hold harmless" the County, elected officials, employees and agents from all liability."
  • Insurance is mandatory. If FilmLA fails to have insurance, FilmLA breeches its contract.
  • FilmLA's indemnification of the LA County is not limited by the dollar amount of its insurance.
  • FilmLA cannot change or cancel their insurance until after the County has 30 days notice.
  • FilmLA cannot obligate the County to pay deductibles.
  • FilmLA has to let the County know if there is an injury or law suite that could result in a claim against the county.
  • FilmLA waives the right to seek recovery against the County.
It would appear that the County's deep pockets are protected from any law suit stemming from a film shoot. If something were to go wrong, FilmLA would be holding the bag. Apparently the insurance needed to meet the County's requirements is pricey. FilmLA reported paying $86,000 for insurance in 2013 and $120,000 in 2014.

On a related note, the California Film Commission has circulated a "Model Filming Ordinance" to local governments that recommends requiring film companies indemnify elected officials and government employees.  Curiously, LA County doesn't not have an ordinance of that sort. Indemnification provisions only appear in the FilmLA contract.

While it's good to know the County, and my tax dollars, are protected, I can't help wondering... am I covered?

What if an afternoon gust topples a 150-pound Arri HMI and it smashes my windshield? Who's paying for that?

According to item #5 in the Terms and Conditions 1 attached to every filming permit, the film company must have general liability and workers' compensation insurance. (The amounts of minimum coverage are left up to FilmLA.)  Consequently, FilmLA will not issue a filming permit unless they receive proof of insurance certificate that meets minimum requirements.

FilmLA requires the following minmum coverage to obtain a filming permit in LA County:
  • $1,000,000 in General Liability coverage
  • $1,000,000 in auto insurance
  • Workers' Compensation Insurance
These insurance policies can have a hefty price tag. Nancy Bond of Nancy Bond Insurance Services, estimates a short term liability policy might run $2,500 - $5, 000 depending on the risks associated with the production plan. A annual policy may run in the tens of thousands of dollars depending on the number of productions covered.

So...if a film company has a permit, they will have insurance.  Is there anything left to worry about?  We asked Nancy Bond and she offered the following advice:
Click here to see an example certificate of insurance
  • If you rent your property to a film company and there's an accident you could be held liable. For protection, make certain you obtain a certificate of insurance from the film company and that your name appears on the certificate as "additionally insured."

    Incidentally, liability may extend to neighbors who just rent a driveway for a porta potty or a yard for craft services. These neighbors should also obtain a certificate of insurance and ask to be named as "additionally insured."

  • Confirm that the certificate includes workers' compensation insurance. You may be liable if the company does not include workers' comp in the policy.

  • Be sure to examine the insured amounts on certificate of insurance. You may want to increase a few items that exceed the minimum requirements set by FilmLA.

    For example, check the "Damage to rented premises box."2 $300,000 is typical. If your property is worth more than the insured amount, consider requesting a higher coverage. Also check the "General Aggregate" box. You may be responsible for liabilities in excess of the policy. If you are concerned the amount of coverage, request "Excess Liability/Umbrella coverage. Amounts of $5,000,000 are not unusual.

    Note: The aggregate total is shared by all the 'insured' and the 'additionally insured.' When thinking about the amount of coverage remember that you are sharing the coverage with the production company, the County, FilmLA and any neighbors who are also covered by the same policy.

  • If you frequently host filming, your insurance carrier may consider you are running a business and require you to purchase a business endorsement.

  • Consider consulting with your insurance broker for the coverage you need when hosting renting your property to a film company.

Getting back to the story at the beginning of this post about the unpermitted film shoot... remember they were working without a permit and possibly without insurance. Is that against the law?

Aside from getting the filming stopped, apparently not.  At least in LA County.

While LA County has indemnification ordinances for taxi companies, cable TV vendors, news rack vendors, marijuana dispensaries, ambulance companies and sidewalk vendors, it does not have one for film companies.3 In fact, the County has many far more ordinances for oak tree removal than it does for film production. In other words, the County could fine you for removing an oak tree without a permit, but not for shooting a film without insurance.

That's not the case for filming in LA City. Don't get caught there filming without a permit. In 2011, the LA City Council passed an ordinance making filming without a permit illegal. If a filmmaker gets caught in LA City filming without permit they could be arrested, fined and their equipment confiscated.

Bottom line: If you host a film shoot, be sure the company has a filming permit and sufficient insurance. Otherwise, you could be running a liability risk

1 Here's a link to the Terms and Conditions appended to every permit.   Click here and search for "Exhibit U."
2 Certificates of insurance companies are typically issued on a 'Certificate of Liability Insurance' Accord form. Consequently, category names should be the same.
3 The following LA County ordinances stipulate indemnification requirements: taxis (7.80.230) Cable TV vendors (16.19.100), news rack vendors (16.27.090), Marijuana dispensaries (7.55.330), Ambulances (3.45.100), sidewalk dinning vendors(16.27.090), oak tree removal permit (22.56 Part 16).

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