Insurance Matters

If you own kit (microphones, mixers, recorders, laptops, mobile phones etc…), that you use for your work, then you might be wise to seriously consider some kind of ‘all risks’ cover for that kit.

‘Own Kit’ covers kit that you own, for ‘all risks’, in territories that you might specify and/or agree with your insurers, ie cover for all risks in the UK only (cheapest) , or EU, or anywhere in the World (most expensive). All risks covers for loss, damage, or stolen kit, on a new, or old, basis. New means that your kit, even if old, will be replaced with brand new kit (and consequently costs more), whereas ‘old’ means that your kit will be replaced up to the current value of the kit when it was lost/broken/stolen (and is cheaper insurance to buy because of this).

Things to watch out for under the policy terms and conditions

• Territorial Limits (where you are covered when you travel with your equipment)

• Transit Limits (some insurers will reduce the limit for equipment in transit)

• Theft from unattended vehicles (some insurers may exclude this cover, or limit it between certain hours of the day/night)

Other potential ‘gotchas’……

Look out for policy requirements regarding security (locks, alarms etc…) for wherever your kit is stored when you are not working

Be aware of policy wordings regarding kit left in vehicles, some will require the kit to be ‘out of sight’, in a locked cage, in a locked  boot, or similar. Some will require a specific standard of alarm and/or locks.

Look out for policy terms if you use your kit in your home as well as when you are out and about working

Be aware of policy terms in the event that you loan kit to someone

Be aware of the potential ‘hierarchy’ of policies, if there are two or more policies that ‘might’ cover your kit, ie you might think that the production company have your kit covered on their insurance policy, where, in fact…. Their policy might state that if you have your own cover, then a claim might default to your policy first.

Be very aware of specific policy wordings on a production company’s policy, ie that they cover your kit when you are working on their location, but that their cover might NOT cover your kit if you drive it home (or to a hotel) and leave it in a vehicle overnight.

‘Hired In Kit’ gives cover as above, but for kit that you have hired in from another company or individual. Many hire companies will insist that you have (proof of) this cover in order to be able to hire kit from them at all. Hired in kit insurance will also include cover for ‘Continuing Hire Fees’. Most hire companies have a condition of hire that states that if you cannot return the kit that you have hired from them (eg that it was stolen, fell in the sea, got impounded at customs) then the hire fees will continue for a set amount of time after that for which the hire was booked. These hire fees ‘could’ cost as much as buying or replacing the kit at the new price.

Things to watch out for under the policy terms and conditions

• Territorial Limits (where you can travel to with the equipment
• Transit Limits (some insurers will reduce the limit for equipment in transit)
• Theft from unattended vehicles (some insurer may exclude this cover or limit it between certain hours of the day/night
• Visible Signs Clause (meaning there must be visible signs of entry or exit to a premises for theft to apply under the policy which sometimes may not be the case when shooting in studios, on location etc..)

Public Liability Insurance provides cover for you against your legal liability to pay compensation and the costs and expenses for the following;

• accidental third party injury
• accidental damage to third party property
• accidental obstruction, trespass, nuisance or interference with any right of way, air, light or water arising in connection with your business.

You might need Public Liability Insurance if, for instance, you are working in someone’s office or workplace, and that they might require that you have insurance cover in place to cover any damage that you might cause whilst on their premises.

The IPS have a Public Liability policy with a £10,000,000 Limit for their members who fit the criteria, please contact us for more details on how to be become a member and take advantage of this scheme.

‘Equipment Breakdown’, also known as Mechanical Breakdown or Electrical Breakdown, will cover the cost to replace or repair technical equipment should a loss be suffered due to internal breakdown.

Also known as Professional Liability (PI), or Professional Indemnity Insurance (PII).

This provides cover in the case that a claim is made by a client or third party suggesting that they have suffered a loss as a result of non-performance, breach of contract and/or professional negligence in the services provided. Some contracts will require that you have PI cover of your own in place. Media Specific also extends to cover Intellectual Property Rights, Libel, Slander, Defamation.

Known as E&O Insurance this operates similar to a professional indemnity, it protects you for negligence in your own media content and advertising, including websites, blogs and social media. So you can rest easy knowing if that post backfires, any legal fees and compensation costs will be covered.

E&O is designed for the unique needs of media and technology businesses, protecting you for infringement of intellectual property, breach of confidentiality or right to privacy, and breach of comparative advertising regulations but will exclude breach of contract

Management Liability cover can include

Directors & Officers Liability

Indemnity to any of your Company Directors, Officers or Members (Insured Persons) for loss arising from a claim as a result of a wrongful act (as defined below) committed by them. Indemnity to your Company for any payment made on behalf of any of your Company Directors, Officers or Members (Insured Persons) for loss arising from a claim as a result of a wrongful act (as defined below) committed by them. Provided such claim is first made and notified to your insurer during the period of insurance.

Affords direct coverage of the insured organization under a directors and officers (D&O) liability policy. Typically, corporate D&O forms only reimburse the insured organization when it is legally obligated to indemnify corporate officers and directors for their acts on behalf of the organization.

However, if a lawsuit specifically names the insured organization as a defendant, the standard D&O policy does not provide coverage. Entity coverage, which until recent years was only provided under D&O policies written for nonprofit organizations and healthcare institutions, is designed to cover the organization directly in addition to its directors and officers.

There are very good reasons for businesses of all sizes to consider taking out specific insurance to cover the potential costs of employment practices actions. Today employees are more litigious than ever. In a world of no-win no-fee legal representation, employment tribunal cases are now in the hundreds of thousands each year. And that’s just the cases that make it to a tribunal instead of being settled out of court.

Cases are getting more expensive as award caps increase annually, and there is no cap at all in discrimination cases. On top of any awards there are defence costs of course, including the employee’s costs if the company loses.

Also known as Loss of Profits Insurance, covers you in the event that your business premises are damaged such that you cannot trade from them for a period of time (eg a fire, or leak, or similar). For this cover would be If your business relies on working out of a particular building, and you would suffer financial loss from not being able to work from that building.

There are 3/4 ways you can cover Business Interruption

• Loss of Gross Profits
• Loss of Gross Revenue
• Increased Cost of Working/Additional Increased Cost of working

Explanations on the covers are below:

1. Loss of Gross Profit

A gross profit basis is the most common choice of business interruption cover in the UK. This covers the loss of net profit following a reduction in turnover, standing charges and also any increased cost of working (see definition in boxout).

Gross profit’s key distinguishing feature is that customers can specify certain costs to deduct in order to arrive at their final sum insured. These deductions are known as variable costs or ‘uninsured working expenses’ (UWEs), and comprise costs that vary in direct proportion to the reduction in turnover. So, if turnover is reduced by 30% that cost will also be reduced by 30%.

The intention of UWEs is to enable customers to not insure costs that will cease in the event of a loss. By insuring on a gross profit basis, any UWEs are excluded, reducing the exposure base to which a BI rate is applied, which means a customer’s premium is likely to be less.

However, incorrectly specifying UWEs is a common source of underinsurance, as many customers do not undertake the proper processes required to identify them.

Who is it suitable for?

The gross profit basis was initially developed for customers with many directly variable costs, such as those in the manufacturing and retail sectors. However, as business models have changed, it is no longer the case that these business types are always best suited to a gross profit basis of cover.

“Using generalisations about business types is not the correct approach to take,” says a Risk Engineer. “Customers need to think carefully about what would happen in the event of a loss – which costs would cease and which would continue?”

2. Loss of Gross Revenue

If, having carefully considered loss scenarios there are few directly variable costs, then a different basis of cover, such as loss of gross revenue, may be more suitable. A gross revenue basis covers the reduction in turnover following a loss and also any increased cost of working. This could help customers avoid some of the inherent difficulties in calculating a gross profit sum insured and reduce the risk of underinsurance.

To calculate a gross revenue sum insured, customers simply need to know the total turnover of their business for the length of the indemnity period. This avoids many of the intrinsic pitfalls in the gross profit calculation and can help provide a more accurate sum insured for those customers where a gross profit basis would bring few or no additional benefits.

Who is it suitable for?

Traditionally, gross revenue has been considered most suitable for the service industry, including businesses such as accountants, solicitors and hotels.

This is because the majority of these businesses’ costs, such as staff and IT, will not reduce in direct proportion to turnover in the event of a loss. These businesses will therefore typically have very few UWEs, giving them less incentive to opt for a gross profit basis, which may leave them exposed if an inaccurate sum insured is calculated.

As mentioned previously however, generalising should be avoided, and each customer should be assessed according to how their particular business operates.

“When looking at business interruption, the key is to get under the skin of the business,” says a Major Loss Adjuster. “Understand how it works and what would happen to its revenue and costs in the event of a loss.”

3. Increased Cost of Working/Additional Increased Cost of Working

As detailed above, increased cost of working cover is included within both the gross profit and gross revenue bases, where it is subject to an ‘economic limit’ However, it can also be arranged in isolation, in which case it will not be subject to an economic limit.

“Increased cost of working is essentially the bare bones BI cover,” says a Risk Engineer. “It provides the customer with cash to cover reasonable additional expenses that will help the business recover following a loss.”

Who is it suitable for?

This basis is only suitable for customers whose business continuity planning and management is such that they will be very resilient to a loss; for example, businesses that are able to easily minimise the impact to their business and might simply require some additional cash to put an established recovery plan into action.

Large multinationals often choose an increased cost of working basis as they might be relatively unaffected by a loss at a single location, have large cash reserves to rely on and may be able to absorb lost capacity in other areas of the business.

Business Travel covers you for medical expenses, emergency travel costs, accidental injury, loss or damage to your property (ie personal belongings) when travelling away for business trips. It can cover business and/or leisure trips by Company Directors and/or Employees, when travelling away from home by air, sea, or rail.

Please check exclusions on he policies re Coronavirus and other such pandemics.

Cyber Liability Insurance covers you for the consequences and aftermath of a cyber attack on your IT or data systems, which could cripple your ability to do your work and/or trade.

This type of policy will cover you for the rectification of any data breaches, system damage, human errors, financial crime, fraud, property damage and business interruption caused by the same.

A recent poll has shown that you are 15 times more likely to have a Cyber attack than a fire, you can also extend this policy to include Cyber Crime i.e. Phishing Invoices being intercepted etc..

A crime insurance policy that is designed to meet the needs of organizations other than financial institutions (such as banks). A commercial crime policy typically provides several different types of crime coverage, such as: employee dishonesty coverage; forgery or alteration coverage; computer fraud coverage; funds transfer fraud coverage; kidnap, ransom, or extortion coverage; money and securities coverage; and money orders and counterfeit money coverage.

Producers Indemnity protects your production budget from losses due to injury/illness/death of cast members or for delay or abandonment due to circumstances beyond your control, for example, a location that you will be shooting at is destroyed in the days leading up to the shoot, causing you delays and additional expense in finding alternative locations.

You will be covered for the additional expenditure incurred to complete the production or in the case of abandonment you will be compensated for the expenditure already incurred. This also covers the non-appearance of actors provided they are under contract.

Multimedia, also known as All Risks Negatives, covers your actual shot media should it be lost or damaged at any stage throughout production. In the event of a claim, this cover will pay for the cost to re-create the lost or damaged footage, or alternatively to reimburse the amount spent should the production be abandoned.

Should you be working in a post-production capacity on media belonging to a third party which you subsequently damage, this cover will provide you with a lump sum to give to your client so they can re-produce the content of the damaged media and allow you to preserve your business relationship with that client.

This is an exclusive cover available only through Performance and gives your clients further piece of mind should they choose to use your post-production expertise.

Besides the tragic loss of human life, the economic costs of terrorism are immense: increased security and anti-terrorist expenditures, consumer and investor uncertainty, supply chain and business continuity disruptions, industry retrenchment – all and more can have negative impacts on economic growth. (1)

Terrorist attacks are also a major threat to the insurance industry, posing the possibility of significant loss of life, injury, and property destruction. And terror attacks involving chemical, biological, or cyber weapons could reach catastrophic proportions.

Definition : a violent act or an act that is dangerous to (I) human life; (II) property; or (III) infrastructure; (iii) to have resulted in damage within the United Kingdom, or outside of the United Kingdom in the case of-- (I) an air carrier or vessel described in paragraph (5)(B); or (II) the premises of a United Kingdom mission; and (iv) to have been committed by an individual or individuals acting on behalf of any foreign person or foreign interest, as part of an effort to coerce the civilian population

Personal Injury covers you (and/or your staff) for actual bodily injury. It can offer weekly payments for partial or total disablement, and lump sums in case of death or loss of limbs/sight/hearing.

This provides cover for business cash stored on premises and is also extended to contract sites worldwide. Please be aware that different limits apply depending on how money is stored and whereabouts it is kept. There is also an assault extension should you or your staff be accosted whilst transporting money to a bank.

Indemnifies you for Costs and Expenses in respect of defending your legal position against a range of claims. Details of the cover provided can be found on your Risk Schedule and in the policy wording previously sent to you. There are also a range of optional covers which you can add to suit your circumstances.

Vehicle being used in connection for your business including vans, cars and fleets of vehicles.

Designed to protect the business against the loss of a key staff member. It is a business contingency plan and will safeguard the company should a staff member who generates large profits for the business fall critically ill or pass away. In this circumstance Key Man Insurance will provide the emergency funding in the form of a lump sum when the company needs it the most.