A new report suggests insurance companies will not cover productions, putting Hollywood’s future at risk.
While many states are gearing up for productions to start as soon as this summer, there is a big obstacle holding many projects back.
According to a new report by Variety, insurance companies are not willing to take the risk to resume productions amid the Coronavirus COVID-19 outbreak.
“In the movie industry, there’s probably $300 million to $500 million in claims because of coronavirus,” says Bob Jellen, managing director of the entertainment practice at Hub Intl., a major insurance broker told Variety.
Many insurance companies have decided they do not plan on covering pandemic-related insurance claims on any new policies. Consequently, producers will have to resume production without insurance or shutdown production indefinitely.
That said, major powerhouse companies such as Disney and Netflix have the capital to absorb the risk of shooting projects during a Coronavirus.
“They would prefer to buy insurance, but in many cases, these streamers and big media conglomerates are bigger than the insurance companies,” Brian Kingman, managing director at Arthur J. Gallager explained to Variety. “They can make whatever they want, whenever they want.”
However, smaller studios face more risk as their projects depend on insurance. One source told Variety, without full coverage on an indie project, you have a very difficult time getting financed.
“It’s sad when certain movies might not be made,” Kingman says. “That independent producer that’s always been such a unique and creative force in the industry needs some help here in order to survive.”
Newsom broke the news on Wednesday with industry leaders including Netflix’s chief content officer Ted Sarandos and critically acclaimed director Ava DuVernay.
Sarandos pointed out productions were underway in South Korea, Sweden, and Iceland and those protocols can be transferred to America once production resumes.
“The choices that we have to make today are not staying home or not, it really is how do we get back to work safely,” Sarandos said. “It can definitely be figured out. We have the smartest people in the world working on it.”
Production will not be allowed to resume until the state reaches “Stage 3” of their reopening plan. That said, California is allowing some counties with low viral infections to start up sooner than later.
“It remains a challenging part of the state for us still,” he said. “We are concerned they will be a few weeks behind everybody else.”
More Project Casting Entertainment news:
