A Completion Bond (also "Completion Guarantee" or simply "Bond") is an Insurance Product. In the Entertainment Industry it protects a Film for the benefit of the Investors.
A Completion Bond insures that a Production will be delivered on Budget and on Schedule.
There are 5 major steps to a Completion Bond:
An independent film production takes time to mature and is never a spontaneous event. It takes strategy, planning and funding to make a Film Production into a reality. In todays Entertainment Industry it also takes modern technology and modern marketing to assure awareness for a film's distribution.
Finally it needs Investors who want to benefit financially from being involved in the Film.
The Insurance Company provides both security for the Investors and a line of defense against many problems that can arise in a Production.
In summary, the Completion Bond will provide the solutions to many problems that are presented.
When the Insurer agrees to issue a Bond to a particular Production this is a recommendation to the Investors that the particular film project in question is deemed sound. Conversely, the non-issuance of a Bond can be a warning to Investors that the project is not a sound one.
A Film Completion Bond oversees the full financial make-up of the Production. It is an audit of the full Production, including Pre-Production, Post-Production and Delivery. They are all being monitored live, while the process of Production and Delivery is happening.
The Insurers require the Risk Management Team to oversee the Production and Delivery constantly during the Period of Cover. Guaranteed Completions will act as this Supervising Entity.
The Insurance Company has the legal power to finish and deliver the Film in the manner the Investors agreed to invest in the first place.
The Insurance Company can choose to provide additional funds to Complete and Deliver the Production or can abandon the Production and repay the spent funds to such parties to the extent covered by the Completion Bond.
Corona is not part of what a Completion Bond covers. Right now there is no insurance product worldwide known to us, which insures against Covid-19.
As long as the Production adheres to local Government guidelines, protects its crew, plans for enough time and budgets for Corona-related costs, there is in general nothing preventing it from receiving a Completion Bond cover.
The cost of a Completion Bond is bound to several factors:
On top of the Insurance Premium, the Broker has to charge local Insurance Tax. Insurance Tax is non-deductible. It should be part of your planned budget from the beginning.
Producers requiring Completion Bonds are normally in touch with the Risk Management 6-9 month before start of principal photography. Due Diligence on an independent film production takes 1-3 month. Rarely Completion Bonds can be acquired in a matter of 4 weeks.
If your Budget is higher - no worries - let's talk.
All kinds of audio-visual Productions can benefit from a Film Bond:
Excluded are Short Films, Commercials, Music Videos and Video Games.
To get a Completion Bond the Producer or Line Producer should approach an Entertainment Insurance Broker.
