A lot can, and does, go wrong on a typical film production. Most of the time producers use some Hollywood magic to fix problems. When that doesn’t work, they use insurance.
Making movies is an inherently risky business. Which is why, before the cameras can roll, an insurance policy needs to be in place.
"We're talking about everything from acts of god, some type of weather related delay … to individual things that happen to different stars or members of the cast,” said Gary Bhojwani of Fireman's Fund.
Fireman’s fund is one of Hollywood’s biggest and oldest insurers, covering everything from the field in “Field of Dreams” to the rats in “Indiana Jones and the Last Crusade.”
"Because of the magnitude of the exposure, in many cases up to $750,000 to $1 million dollars a day ... many financiers understandably will not engage in this type of a production without insurance behind the transaction,” Bhojwani said.
Insurance adjusters in Hollywood have seen it all. From the house explosion in the final scene of “Thief,” which would up burning a neighbor’s house down, to scenes of banter in Woody Allen’s “Manhattan” having to be reshot because of faulty film stock.
"One of the other things you want to make sure is that you have cast insurance which will provide you with the insurance to cover any cast members in the event there's any delays in filming," said Tully Lehman of Insurance Information Institute.
Of course some stars with a history of getting into trouble require additional coverage – think Courtney Love or Robert Downey Jr.
Death during filming – a producer’s worst nightmare – is also typically covered. John Candy died during filming of “Wagon’s East,” Brandon Lee during “The Crow,” and Oliver Reed during “Gladiator.” In each case, insurance paid to complete the film.
Film insurance policies typically range from three to five percent of the total production budget. With those budgets rising steadily, so are premiums. And if a producer fails to finish a film as promised, a special kind of coverage called completion bonding kicks in, allowing an outside bonding agent to come in and actually finish the film.