By: Tifanie Jodeh, Esq.
Victoria Couch
The media and entertainment industry in the United States alone is a multi-billion dollar market. As we know, the outbreak of COVID-19 in March of 2020 devastated the entertainment industry.
After months of quarantine, people are anxious and desperate to get back to work. However, the big question is whether productions will be able to find the necessary insurance to begin shooting again.
Production insurance is both extensive and expensive. There is workers compensation, errors and omission, and special add-ons, to name a few. Insurance is a top requirement to have in place for financiers, lenders, and banks.
Risk is the entertainment industry’s middle name. When adding in COVID-19 to the mix, very few, if any, insurance brokers are willing to issue coverage policies. These risks include: cast and crew contracting the virus, the risk of COVID-19 continuing for an indefinite period of time, and the ultimate risk of a project having to rely more heavily on its insurance policy than its revenue; if the project is ever completed and delivered. New insurance policies will be difficult to obtain as issuers are not comfortable with attaching themselves to anything related to these risks.
To reignite production, many production companies around the world are looking now to the programs offered in Australia for an alternative solution.
Under ideal circumstances, the extensive 41-page COVID-Safe Guidelines Australia released in May should have been enough to allow and encourage productions to restart.
The Australian government recognized its entertainment industry was one of the first to be severely impacted by COVID-19 and will be one of the last to fully recover and return to pre-coronavirus standards of production. To assist the industry and people’s livelihood, the government created a A$250 million (US$180 million) package to support the arts, concerts, and events with A$34 (US$24 million) million going to the Australian screen industry.
“We’re delivering the capital these businesses need so they can start working again and support the hundreds of thousands of Australians who make their living in the creative economy,” [Prime Minister] Morrison said. These funds are crucial because they ultimately will serve as an insurance backstop to help minimize production risk.
The Australian government is offering grants and loans to its creative arts industry as a source of backing. One area of the support package is to launch local film and television productions by dedicating $50 million (US$36 million) to the Temporary Interruption Fund (TIF). According to Screen Australia, a Federal Government agency supporting Australian screen development, production and promotion, their “total liability under TIF for a production will be capped at 60% of the total budget, or $4 million, whichever is less” (ScreenAustralia.gov.au, Temporary Interruption Fund). Screen Australia lays out several conditions for being eligible, such as the time period for commencing principle photography and the requirement for obtaining special insurance. The insurance is FPI. “The applicant must have ‘Film Producers Indemnity’ insurance covering named individuals from an approved insurer… TIF only applies to productions with FPI insurance that excludes coverage for COVID-19 events” (ScreenAustralia.gov.au, Temporary Interruption Fund).
Essentially, TIF is an added layer of insurance provided by the Federal Government to the insurers.
This is not a perfect solution to the COVID-19 issue. Risks will still be prevalent and cast and crew will need to adjust to new protocols. However, despite all of the related challenges, the Australian government is “setting the stage.” They are becoming a guiding light for other countries to follow their lead and financially support their entertainment industries to help them get on their feet.
