On Making Movies

by Billie Swift

On Making Movies Today’s sophisticated visual effects make the perils of moviemaking obvious. It is often the subtle and unique qualities of a movie, however—those moments or cinematic vistas that were a film to be missing would diminish its entire essence—that test the creative prowess of those responsible for insuring, and ensuring, the successful completion of a production.

Picture the 1989 film Field of Dreams taking place during a drought; or picture A Simple Plan (1998)—with its Fargo-like winter backdrop— taking place during the rainy season. These movies would have lost their visual impact had the natural effects—a field of corn stretching wider than the eye could see; a biting, omnipresent cold—been missing from the screen. In fact, because of the importance of these natural effects, both films were nearly scrapped. And then came insurance.  

Completion Bonds and Underwriters
Moviemaking is a three-tiered enterprise: preproduction, production and postproduction. Preproduction, which follows the initial screenplay development, involves getting approval for the project, from the producers to the underwriters, and determining a start date for the picture. Among other things, the film’s underwriters are responsible for providing a completion bond. This bond guarantees that the picture will in fact be completed.

Given the obvious risks, the terms of such bonds can be quite strict and require a great deal of initial work in order for all parties to agree on them. Insurance companies are often the stars of this aspect of filming, playing a key role in coming up with the proper coverage so a completion bond can be worked out, no matter how tricky the venture may appear.

Moviemaking, Risktaking and Those Who Bring It All Together
Not too long ago, realistic recreations of Mother Nature’s special effects were a difficult task—just compare the flying witch in The Wizard of Oz (1939) with the flying cow in Twister (1996). Increased moviemaking sophistication—along with giving Mother Nature the occasional dramatic look—allows filmmakers to accomplish subtle yet powerful scenic backdrops.

Brian Kingman, senior vice president at Los Angeles-based AON/Albert G. Ruben, a brokerage firm specializing in entertainment insurance, has been working in the field for over twenty years.

“When I first got in the business, a big-budget film was ten or fifteen million dollars; now a big film is two hundred million dollars plus,” says Kingman. “The size of the budgets, the complexities of filmmaking, and the special and digital effects have all become more sophisticated and more costly.” Kingman also notes that the expectations of moviegoers have gotten “extremely high.”

The level of coverage needed to insure projects of increased scope and grandeur are becoming quite expensive.

While planning the production of A Simple Plan, the directors and producers had a strict vision of what the scenery should look like. They wanted a dark, wintry look, requiring a thick blanket of snow and blizzardlike conditions that would last long enough to film the external scenes. This strict vision, however, did not sit well with the guarantors. Forecasts for the Minnesota area—where filming was originally planned to take place—were predicting the arrival of La Nińa. This meant warmer temperatures and very little snow. The project needed increased financial assurances before the guarantors would be willing to agree to a completion bond.

Kingman was involved in much of the early planning stages and recalls how complex and financially risky the project was.

“They insisted that we go out and buy weather insurance for a three-hundred-and-sixty-degree, twenty-six-mile blanket of snow—without showing any ground,” says Kingman. That is a two-inch-thick blanket of snow covering an area of over two thousand square miles.

By purchasing insurance to cover three scenarios, Kingman was able to successfully insure the film to the satisfaction of both the financial and artistic interests. He provided insurance that would cover the costs of relocating if the snowfall on the planned production site was inadequate; he provided insurance that would cover the costs of abandoning the film if snow failed to fall in any part of the country; and he provided insurance that would cover the expenses of waiting out the weather—at a cost of around $125,000 a day—in order to film at the planned site.

“That was extremely expensive,” says Kingman, “but it was the only way to get the bond company to bond, and it was [later] determined that it was the single reason that allowed the film to be made.”

As forecasted, La Nińa did in fact hit the Minnesota area. Fortunately, the prepurchased insurance coverages gave the filmmakers the necessary flexibility to handle the setback.

The filmmakers, facing a Minnesota landscape of barren ground, decided to move the entire production to Michigan rather than abandoning the project, costing the insurance company a loss in the mid-six-figure range, but allowing a final product very much in line with the initial plans.  

Weather also played a key role on the set of Field of Dreams. Hoping to place the ghosts of baseball past in the midst of towering rows of corn, the filmmakers needed a fertile period of growth in order to create some of the movie’s more famous scenes. Realizing how essential this cornfield was to the production, Kingman created an insurance buffer against any agricultural disasters. The extra expense coverage was enhanced—or, as Kingman says, “increased to plan for the most unlikely situation”—to cover the losses associated with having to obtain a “natural” cornfield where Mother Nature herself provided little assistance.

“We arranged for a crop cover,” says Kingman, “and sure enough, a drought hit. There were two options: one option was that the producers abandon the film, and the insurer pays off a very, very large loss; and the other option was to creatively fix the problem, at the insurance company’s expense, so the producers could make the movie.

“So,” says Kingman, “they fabricated corn. They trucked in water, they grew [the corn] in cans and they put it on boxes created to make the corn look taller than it was. They spent hundreds of thousands of dollars doing this to avoid a multimillion dollar problem in abandoning the film. That was an extraordinary contingency coverage.”

Cast Insurance of a Different Kind
Weather is not the only star of the show for which Kingman has had to modify a few policies. In some cases, Kingman has had to adjust cast insurance to include coverage for the unconventional cast member.

On the set of K-9, a 1989 Jim Belushi movie, the veritable star of the film was Rando, a German Shepherd. “We actually insured the animal for twenty-five million dollars,” says Kingman, “in the event of a death, injury or sickness that caused an abandonment of the film. There were some backups, but Rando was the hero dog.” To make certain—were something to happen to Rando—that the backup dogs would be able to replace him in his remaining scenes, the dogs were separated in transit in order to diversify the risks of losing the film’s star character.

Similarly, on the set of Flipper (1996), which was filmed in the Bahamas, insurance policies had to be adjusted to fit the needs of the project. Kingman insured the dolphins as cast members and also used the extra expense coverage to insure the dolphins against escape. Kingman was not, however, too concerned with the latter: “Why would the dolphins want to leave the four star accommodations, including room service,” he says, “to fend for themselves?”

The Show Must Go On
The role of entertainment insurance is to determine the relevant risks of a project and create the necessary cushions and options to deal with whatever may come. Sometimes the crisis is large, such as that faced by A Simple Plan; other times it is one that requires minor alterations. An innovative and creative energy among all interested parties, from the director to the insurer, is vital to bringing audiences the kinds of movies so perfect in design, one cannot help but believe every minute.

Reprinted from Risk Management Magazine.
Copyright Risk Management Society Publishing, Inc. All rights reserved.