Production Completion Bond Coverage
Many films and production has a written contract that guarantees production will be completed on time and on budget. Completion Bonds are also going to be required by a studio, bank, individual, or investor who is providing funding for the production.
A Production Completion Bond steps in if your production can’t be completed. These bonds are written by a special group of insurance or bonding companies. The bonding company will finish the film, or your investors can redeem the bond for cash, subject to bond terms and conditions. The bonding company can’t guarantee the production will be a “success” but rather it will be completed.
Before the Completion Bond can be executed by the bonding company, the following will need to be provided.
- Budget
- Total production costs
- Contingency funds
- Shooting schedule
- Script
- Cast
- Resumes of key crew
- Review of project financing
- Insurance
The bond company will then decide to guarantee or not to guarantee the production. If they decide to guarantee the production they may want to monitor the production through to completion. If the bonding company determines that the production will not meet its obligations, it could place a representative on site to review daily operations. The standard premium is around 6% of the amount financed. In reality this percentage is negotiable, especially if you have experience and have been under budget and on schedule for other productions.
Of course the larger the production the more detailed information will be required by the guaranteeing company.
MovieInsure.com offers a wide variety of A-rated, Admitted and Non-Admitted insurance companies for our clients to choose from. We only deal with companies that are on the Insurance Commissioner’s approved list.
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