Managing costs in independent films

The 66th BFI London Film Festival shines the spotlight on the talents of the UK independent film industry, which is considered amongst the best in the world. The festival, which runs from 5th to 16th October, will showcase a dynamic and vibrant programme of 164 feature films from around the world. All films will be screened to UK audiences first, including 23 world, six international, and 15 European premieres. 

The festival will open with the world premiere of Roald Dahl’s Matilda The Musical and close with the European premiere of Rian Johnson’s Glass Onion: A Knives Out Mystery. World premiere features include stop-motion animation Guillermo del Toro’s Pinocchio and Asif Kapadia’s Creature. The LFF Series will also return with eight series, including the world premiere of Hugo Blick’s series The English, starring Emily Blunt and Chase Spencer, and the third season of Lars von Trier’s The Kingdom Trilogy. 

Financial pressures on independent film 

The UK’s independent film market is amongst the best in the world, but as the film distribution model evolves to cope with the growth of the large streaming platforms, the financial pressures on independent filmmakers have increased. The BFI’s latest report, An Economic Review of UK Independent Film, says independent filmmakers face significant inflation in production costs, including studio space, cast, and crew. The report also states that they have been disproportionately affected by crew shortages. The UK has become the destination for streaming giants, who value UK’s production talent and tax breaks. The BFI’s review sets out four recommendations to be explored and modelled to build a more sustainable independent film sector: 

• An increase in film tax relief for UK independent films. 
• An extension to film tax relief to include prints and advertising (P&A) spend on UK independent films. 
• The introduction of a new zero rate of VAT on the exhibition of UK independent films. 
• An increase in the financial contribution of large streaming services to UK independent films.

“The report provides clear evidence of market failure and that this has been significantly exacerbated because of the pandemic,”

said John McVay, Chief Executive of producers’ organisation PACT.

Protecting the production 

Many things can go wrong on a film set; things don’t always go as planned. Filming can run into delays, equipment gets lost, and crew members can become ill or get injured. These issues have led to increased demand for film production insurance, but what should producers look for when purchasing film production insurance?  

Film production insurance (FPI) shields a production from liability up to a specified amount of money. Each insurance policy is arranged around the production company’s needs.  

While completion bonds offer protection for film investors, FPI insurance should also be in place to cover incidental damages on set or losses. An FPI policy will typically cover death or sickness of the cast, damage to or faults with hard drives, negatives, equipment, loss of set items, theft, and other losses. Specialised policies can usually be added on according to the shoot. For instance, the insurance policy for a feature film shooting underwater would vastly differ from a commercial shoot on a used car lot. Costs vary depending on the cover selected; both policies protect the producer should anything go wrong before, during, or after filming.  

Cast Insurance 

Designed to insure against additional production costs (including abandonment) incurred in the event of accident, sickness or death of persons accepted for cast cover. 

Extra Expense Insurance 

Cover against additional costs incurred in the event of physical damage to property by any external cause resulting in the interruption or abandonment of the production. 

Negative and Videotape Insurance (Including Faulty Stock Camera and Processing) 

Providing cover against additional production costs due to loss or damage to raw stock, exposed film, videotape, or digital media storage devices, including the soundtrack. 

Props, Sets, and Wardrobe Insurance 

Cover for the cost of repair or replacement resulting from physical loss or damage to owned or hired props, sets and wardrobe during the production. 

Miscellaneous Technical Equipment Insurance 

This covers the cost of repair or replacement resulting from physical loss of or damage to owned or dry-hire camera, sound, lighting, and miscellaneous equipment used during the production. 

Property of Others Insurance 

Protection for damage to or loss of third-party property used or under the care of the production. 

Production Office Contents Insurance 

Cover can be provided for loss or damage to temporary office contents, e.g. items purchased, hired, or borrowed by the production team’s use only. 

Money Insurance 

This section provides cover for loss, destruction, or theft of cash and other negotiable documents carried or held by the production. 

Employers’ Liability Insurance 

Employers’ Liability (EL) insurance pays compensation for UK employees’ injuries or illnesses caused by the production’s negligence. It will also cover the legal costs necessary in defending a claim. This section meets the legal requirement for Employers’ Liability insurance. 

Public & Products Liability Insurance 

This section covers the potential legal liability to compensate third parties that experience personal injury or property damage if the production is negligent. 

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Kerry London is authorised and regulated by the Financial Conduct Authority. The company is a leading UK independent and Lloyd’s accredited broker, which means that we work with a wide range of niche and major insurers.

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