Cy Weaver and Michelle Reynolds, Insurance Brokers at Burns & Wilcox Global Solutions

The recent filing of a $10bn lawsuit against the BBC by President Donald Trump over a documentary made before the 2024 US presidential election is a high-profile reminder of the financial risk media companies can face.

The dispute takes place against a backdrop of rising insurance indemnity limits across the media industry, as entities seek to protect themselves from increasingly sizeable claims. Meanwhile, the nature of the media risks borne by production companies, advertising agencies and brands is also shifting.

In this article, we examine rising indemnity limits, unpack the implications of generative AI and pandemic exclusions, and set out practical steps to manage celebrity no-shows and attritional losses.

Higher limits and combined coverage solutions

In recent years, we have seen brands working with production companies and advertising agencies increasingly require higher professional indemnity (PI) limits in their commissioning contracts. This is representative of the much larger audiences content can reach via today’s global online channels and the heightened risk of intellectual property (IP) and/or copyright infringement. It also reflects the significantly increased costs of defending a potential legal claim.

To meet these requirements, production companies often need to buy PI as well as a commercial producers’ indemnity (CPI) policy to cover the costs of a reshoot and additional covers such as equipment, employers’ and general commercial liability. Burns & Wilcox offers PI and production covers as part of a combined CPI proposition. This simplifies insurance programmes, offers better value than multiple standalone policies and ensures covers are held with a single carrier, making claims handling easier.

Generative AI and professional indemnity

One area of PI exposure that has recently gained a lot of attention is the impact of AI. While generative AI opens up a host of avenues for creative development, it also widens the range of possible liabilities around IP and accuracy.

The Lloyd’s Market Association’s International Professional Indemnity Committee has already produced a report on generative AI’s impact on professional sectors, and the market is actively discussing how to align cover with evolving exposures in the creative industries.

How to manage celebrity no-shows

A-list celebrities, actors and models are in high demand. More appearances may extend their earning potential, but this may also put pressure on the stars’ ability to fulfil commitments. This situation has led to a growing risk for clients: the non-appearance of their top talent.

Depending on the scale of the project and the people involved, insurers may seek additional premiums or large excesses for non-appearance cover. Robust up-front clarification, however, can ensure measures are put in place to mitigate such losses. For example:

  • Does the celebrity’s contract include provision to come back and reshoot on another date if they are unable to make the original appointment? It is always preferable to reshoot than to abandon a project entirely.
  • Is it possible for someone else to step in on the star’s behalf if there is an issue? If so, it is best to have this person on standby.
  • Have provisions been made to ensure the celebrity arrives in the vicinity of the shoot location with sufficient contingency time? We recommend the day before they are due on set. Jetting in last-minute increases the risk of non-appearance exponentially.
  • Is the celebrity in good health and have they declared pre-existing medical conditions? Confirming this ahead of time means plans can be put in place to mitigate potential issues.

Our delegated authority arrangement allows us to write cover in-house, so collecting this detail makes it possible to manage and mitigate non-appearance risk and avoid additional premiums or increased excesses.  

Equipment damage and weather disruption

Some losses are more difficult to mitigate. Transit damage and delays are perennial problems, as are on-set mishaps affecting lights, cameras, laptops or microphones. When productions move outdoors, the risks multiply. Inclement weather – particularly wind or rain – that can cause damage and in some cases lead to cancellation. As equipment becomes more sophisticated and expensive, the overall cost of these relatively small but attritional losses is rising. Furthermore, the industry has seen an increase in targeted theft claims, particularly from unattended vehicles. In some instances, production staff have been threatened. Adequate and professional security on set and guarding unattended vehicles is therefore important not only to protect the equipment but also the employees.

Pandemic exclusions and market response

One area of loss that looks set to remain under a total market exclusion is communicable disease. Covid-19 halted film production, leading to significant losses for insurers. As a result, losses that arise from communicable diseases and/or pandemics are now excluded from standard wordings.

Nevertheless, there is no shortage of appetite from underwriters looking to expand into this niche as a way to diversify their book of business. This has kept downward pressure on rates and driven continual adjustment to the scope of available wordings.

While most production firms will never face the legal firepower of a high-profile dispute, they do need to address their increasing exposures in this changing market. Combined cover solutions and thorough pre-production underwriting remain the best defence against these evolving risks.