December 3, 2021

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Film, TV productions hobbled by lack of COVID-19 insurance

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As business continues to pick up amid a pandemic slowdown, TV and film studios are still faced with millions in costs to comply with COVID-19 safety protocols because some insurers are denying pandemic coverage.

Anamay Carmel, an attorney with Pasich LLP who represents insured clients in coverage disputes involving production insurance policies, said insurers are claiming those provisions are now the “normal” cost of doing business and should be paid for by the TV and film companies.

“Insurers are refusing to acknowledge coverage even though policies that were in place last year should cover anything extra that occurred as a result of the pandemic, such as interruptions, delays and added safety measures,” she said.

Big-budget productions will likely be able to absorb the additional expenses, she said, but tacking another $1 million to $2 million onto a smaller production will have a heavy impact.

“We may never see many of these projects get off the ground if insurers wrongfully deny coverage,” Carmel said. “Interpreting this as a ‘normal’ business cost is too much of a stretch.”

Film and TV studios have had to adapt to survive the impact of the COVID-19 pandemic. Sets have become regimented by new safety protocols, including social distancing, a requirement to wear masks, COVID-19 testing and temperature taking.

Some insurers revamped their pandemic-related policies as COVID-19 wore on.

“We don’t offer COVID insurance,” said Christina Lam, a representative with Athos Insurance Services LLC, a Pasadena-based broker that provides coverage to TV and film companies through a variety of carriers. “Our policies are meant to cover unexpected and unforseen events, but most have an exclusion for COVID.”

When the pandemic first kicked in the carriers were offering refunds as productions were canceled, Lam said, but that ended as the pandemic continued.

“It would cost a lot of money to continue that,” she said.

TV and film companies receive medical guidance from federal and state governments, as well as input from unions regarding how they can make their productions safe, Carmel said, and much of that guidance overlaps.

“It involves COVID-19 testing, shooting at different times, temperature checks and personal protective equipment requirements,” Carmel said. “These costs should be covered, but this is a battle playing out in the courts.”

Loyal Studios, a Burbank production company that works with such clients as Disney, NBC, Universal Studios and Nikelodeon, has footed the bill for its COVID-19 safeguards.

“We’re operating with our own safety protocols that comply with the Screen Actors Guild and the Producers Guild of America,” Loyal owner Bob Bekian said. “We provide masks to all of our clients and we have a pretty high intake protocol for people coming in.”

Clients entering Loyal Studios walk through a scanner that uses thermal technology to read their temperature.

“We capture that on a digital program and we need to know that someone has been vaccinated,” Bekian said. “We also provide a compliance officer. That’s another extra cost, but our clients require tight protocols, so we pay extra to ensure we have a safe studio.”

Bekian said business has been gradually picking up as COVID-19 continues to wind down.

“Some of the union shoots are slower to come back,” he said. “But independent productions — including gaming productions and live streaming — have picked up. And almost every shoot now has an off-site party who participates through Zoom or some other technology.”

That’s become far more common with international productions, Bekian said, as many clients see the advantage of reducing travel and saving money.

“The technology was there before, but it wasn’t being used as much,” he said. “Some people are even directing productions from Europe.”

Carmel said companies that have to pay for their own COVID-19 safety protocols typically see their production budgets increase by as much as 15%.

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