Insurance issues remain after fire at SABC studios

Clive Shelver, MD, Film & Entertainment Underwriters

Soapie lovers around South Africa were shocked recently to hear the mid-June news that a huge fire had raged out of control for more than three hours at the Henley Studios, destroying the Isidingo set and taking SABC 3 off air for a few hours in the process. In addition, the fire affected the production of both SABC 1's Generations soap and SABC 2's Muvhango soap moving forward.

It was apparently the biggest fire ever to have occurred at the SABC's Auckland Park headquarters - damage so far is estimated in tens of millions of rands. A section of the building was later sealed after the department of labour issued an urgent order. Fortunately, no one was injured in the blaze.

Clive Shelver, the managing director of Film & Entertainment Underwriters, a specialist insurance underwriter underwritten by Compass Insurance, says the recent fire highlights the critically important role of insurance for local production companies to cover themselves against the potential financial impact of such a disaster.

Impact of the fire

Questioned on the likely financial impact of the fire, he says, "This would depend on a number of factors such as how many advance episodes were made before the disaster, whether there are back-up facilities available, such as a second equipped studio or other contingency plans in place to allow the production to continue, and what contracts were in place with the crew and cast and any other suppliers."

He adds, "The issue of how long it could take until the set is fully operational would depend on what alternative studios and equipment are available, as well as the availability of set builders to rebuild the necessary damaged sets."

In the case of the Isidingo producers, Endemol, such matters may not be entirely within their control as they are using SABC facilities. Therefore it is arguably even more important for production companies to try to mitigate potential risks. Shelver advises production companies to take the matter of production insurance seriously and deal with brokers and insurers who are properly versed in film insurance, so the correct cover can be arranged.

He says, "Production companies need to take proper measures to mitigate such risks. Wherever possible, arrange for backup facilities in respect of locations , equipment and so on to be on standby - this will also reduce the cost of your insurance in some instances. Make sure there are proper risk management procedures in place regarding fire and other perils prevention."

According to Shelver, the common risks production companies face include:

• Damage to film, tape or digital card.
  
• The absence of key crew during filming as a result of an accident before or during shooting.
  
• Damage to props, sets and wardrobe.
  
• Damage to third party property whilst filming.
  
• Loss of filming facilities and locations.
  
• Loss and/or damage to filming equipment.
  
• Liability to the public when shooting.
  
• The inability to meet flight time deadlines as a result of any of the above.

He concludes by advising production companies, "Do not treat your film production insurance as a 'last minute' necessity or a 'grudge' purchase - take time to work out where your risks can be and attempt to cover them adequately."

Clive Shelver began his career in insurance 39 years ago. He is a fellow of the Insurance Institute of South Africa and managing director of Film and Entertainment Underwriters SA, a specialist underwriting agency providing insurance to the film and entertainment industries.