How do Hollywood studios handle the process of film insurance and risk management?

Hollywood studios have to manage a range of risks while making movies, and one of the most important aspects of risk management is film insurance. A film production is a complex and expensive process, and it involves many risks that could lead to financial losses if they materialize. Therefore, studios take a proactive approach to risk management by purchasing a variety of insurance policies to protect themselves against different types of risks.

One of the primary insurance policies that studios purchase is a completion bond. This type of insurance policy guarantees that the movie will be completed on time and within budget. If the movie is not completed on time or within budget, the completion bond company will step in and take over the production to ensure that the movie is finished according to the original plan.

Another important insurance policy that studios purchase is liability insurance. This type of insurance protects the studio against any lawsuits that may arise during the production or after the release of the movie. For example, if a stunt performer is injured during the production of a movie, the liability insurance policy will cover the medical expenses and any damages that the studio may have to pay as a result of the injury.

In addition to these policies, studios also purchase insurance for property damage, loss of revenue due to unforeseen circumstances, and errors and omissions insurance to protect against any legal claims related to the content of the movie.