Canadian Underwriter

Lights. Camera. Claims action!

November 20, 2020   by David Gambrill

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In the Canadian entertainment industry, time is money, and so when the global pandemic forced time to stand still, it hit the entertainment industry with the force of a catastrophic event.

When COVID-19 hit, Crawford & Company’s adjuster and film and entertainment subject matter expert Frederick Amirizian received the same amount of claims in one month as he typically saw in an entire year, according to a recent Crawford White Paper, Entertainment Contingency Claims.

And, unique to the world of entertainment, some of the many COVID-related insurance claims based on the shutdown of production could be downright bizarre.

Take, for example, the insurance claim involving animals bred specifically for a TV production.

“That production was forced to shut down because of COVID and they were stuck with animals and unable to return them to their original breeder,” Amirizian said. “They had to feed them, keep someone on location to make sure they were okay…and the production needed cubs, but obviously the animals don’t stop growing.”

Once COVID lockdowns were lifted, the filming crew worked as quickly as possible to make sure that they could continue to use the animals, which incurred major and unexpected costs.

Entertainment and media is a highly specialized field of insurance and claims can be very costly. According to the Canadian Media Producers Association, as cited in the Crawford White Paper, the Canadian film and television production generated nearly $9 billion in production volume and approximately 179,000 jobs.

Related: Many Canadian film and TV productions held up by lack of COVID 19 insurance

Film and television production is a $12.8-billion, round-the-clock business tied very heavily to rental and equipment costs, labour costs, special effects work, and marketing (which is also deadline-driven). Production delays, often the result of actors falling ill or faulty equipment, typically drive insured losses in show biz.

“But when the COVID-19 pandemic hit, it brought on a simultaneous wave of claims because all production was halted at once,” Crawford observes in its White Paper. “And even though the production halted for the same reason, all pandemic-related claims were different or atypical. Uncertainty around restarting or relocating production loomed, and there were limited mitigation measures.”

By the time Canadian provincial governments began lifting some of the most severe lockdown restrictions, which were enforced to prevent the spread of the virus, production crews still had a number of issues to figure out. Projects that had re-started were still making never-seen-before claims related to accessing existing set locations, re-creating sets elsewhere, and ongoing social distancing requirements.

“Some productions have resumed, but it’s hard to shoot action, comedy, or romance scenes [while] keeping appropriate distancing,” said Crawford’s executive general adjuster John Sharoun, who joined Marcel Lacoste, a pioneer in entertainment claims, in mentoring Amirizian. “There are scenes that have to be reviewed and the logistics of production to be re-thought…and the question of how coverage may apply arises because these are unusual scenarios.”

Amirizian adds that while the situation triggering the production delays and claims may have been the same (the global COVID pandemic), the claims were all different. This highlights the extraordinary level of complexity in handling entertainment claims.

“The same situation happened to everyone, but they all have different challenges because they are not filming the same product,” Amirizian said.

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