Guest Column: When You Update Tech, Update Your Insurance
Suggestions for ensuring that your coverage meets your needs
The sports-production industry is currently in the midst of an unprecedented level of change, and no one knows that better than those involved in the mobile-production side. Whether it’s a 53-ft. double-expando truck or a small flypack, the facilities are evolving to keep up with the changing needs of a client base. More mobile units are being converted or built on IP infrastructures, and production equipment like cameras and switchers are being upgraded to 4K, HDR, or super-slo-mo. The changing technology landscape leads to varying costs associated with mobile units on a year-to-year basis, and, in any scenario, it is important to have your insurance track with your overall exposure, holding accurate limits that reflect the risk at hand. Here are some tips on how to make sure your insurance coverage keeps up with your technology.
First, begin by reviewing the value of your equipment on a quarterly basis instead of yearly. This will increase information accuracy and, therefore, decrease the potential of uncovered claims. You potentially could have gaps when a new piece of equipment has not been reported to the insurance company or if it moves among different locations frequently. A more dynamic approach will also make sure you are aware of new workflows and technology available to help track and manage assets more effectively.
Second, understand which trucks and equipment were priced on actual cash value (ACV) vs. replacement cost. This should be reviewed yearly to make sure you agree with the insurance company’s definitions, because serious discrepancies in claim payments and premium amounts can result when the two terms are confused. Payment based on the replacement cost of damaged or stolen property is usually the most favorable to the owner of the equipment, compensating the actual cost of replacing the property. If your camera is stolen, a replacement-cost policy will reimburse you the full cost of replacing it with a new camera of like kind.
In contrast, ACV, also known as market value, is what insurance companies arguably prefer when reimbursing policyholder losses. Actual cash value is equal to the replacement cost minus any depreciation. It represents the dollar amount you could expect to receive for the item if you sold it in the marketplace. In the case of the stolen camera, the insurance company would deduct from its replacement cost an amount for the wear and tear it endured prior to the time it was stolen. At the end of the day, the decision is whether to go with replacement-cost insurance, which is more expensive but offers a higher degree of continuity in the event of loss, or ACV, which is less costly but may leave you on the hook financially in getting operations back to normal.
Also, make sure to call your insurance company or broker annually to review all claims. You’d be surprised how often you discover, say, a run of accidents involving a certain location, driver, or vehicle model. Fix the underlying problem, and your accident rate and premiums will fall.
And make sure to take a step as simple as creating a series of checklists for key tasks in advance of a field operation. Then communicate to all involved in your operations that the checklists are to be followed and ensure that the management team models ideal behavior by conspicuously following all the rules.
At Crystal & Company, a New York-based insurance and risk-management company, we look to make following a system easy by serving as an extension of your organization. This alleviates strain on your team and also provides a more focused resource on risk management and insurance needs. It keeps our clients focused on their main goal, expanding their business and looking forward, while we are at the backend limiting risk and exposure.
Hellmuth, a director in Crystal & Company’s national sales team, offers insurance consulting to production and entertainment clients and is ready to assist you in any evaluation of your needs. Reach him at Nicholas.firstname.lastname@example.org or (212) 504-1827.