View more
Download PDF

Workers Compensation and General Liability Information

Provided by Taylor + Taylor

As you will quickly learn, you will not be able to employ crew, rent equipment or secure a location without insurance. Since there are many types of insurance available, this handout will give you some of the basic jargon used in the business so you will be better equipped to understand what is being asked of you.

In order to employ freelancers/crew in any state you must provide worker's compensation insurance should your crew member get injured in the course of your project.

Worker's compensation provides coverage for medical services needed to treat work related injury or illness, disability income to help replace lost wages and/or a death benefit should a crew member be injured or killed in the course of their employment. Many people will think of crew as freelance people or independent contractors rather than as employees and it is a common mistake to elect not to purchase worker's compensation to protect these individuals.

Next you will find that you will not be able to rent any film, video or lighting and grip equipment unless you have miscellaneous equipment and liability insurance. There will be few, if any, equipment rental companies that would be willing to rent you equipment worth in excess of $1,000,000 unless you show them that you have insured their property against damage or loss while in your possession. Furthermore, since the rental equipment house will have no idea how you are going to use their gear, they will require that you maintain at least $1,000,000 in commercial general liability insurance and that you share that limit with them by naming their rental equipment company as an "Additional Insured" on your policy.

Miscellaneous Equipment is a property insurance policy that usually will cover breakage if you drop the item or it gets damaged in transit. Furthermore, miscellaneous equipment will normally cover rented equipment wherever that property happens to be used. One of the most common types of claims is theft from unattended vehicles so it is very important that you not leave this valuable property in an unattended vehicle and it is especially important to make certain that the insurance you buy provides protection against this type of loss. It is also important to note that the miscellaneous equipment limit will apply to the value of equipment you rent from all sources, so you must make certain that the coverage limit you purchase will adequately cover the total replacement cost of all equipment you have rented. Your equipment rental vendor will also require that you name their company as a "Loss Payee" on your miscellaneous coverage. The "Loss Payee" wording ensures that when a claim is adjusted by your insurance carrier, the loss proceeds are paid in the name of either the equipment rental company or to both your company and the rental company. The ultimate goal of the use of "Loss Payee" wording is to make certain that the equipment rental company or equipment owner receives the loss proceeds that have been released by the insurance company for repair or replacement of their damaged equipment.

Commercial General Liability policy covers bodily injury and property damage claims brought against your company by third parties arising from production related activities. When someone asks to have their company added as an "Additional Insured" on your liability policy they are asking that your insurance carrier extend your coverage and policy limit to apply to both your company and them for claims arising from your production activities. It is customary for an equipment rental company, an advertising agency/client or a location to request that they be named as an additional insured on your policy. These people want you to protect them should they be brought into a liability claim that is the result of something that occurred during production and that was not their fault.

Some of the important exclusions in the commercial general liability policy are listed below, as well as the corresponding types of coverage that you should consider purchasing:

EXCLUSION (INSURANCE TO CONSIDER):

• Injury to Crew or Employees
  (Worker's Compensation)

• Use of Automobile, Aircraft or Watercraft
  (Non-owned Automobile, Aviation or Watercraft Liability (Owned if Owned Automobiles, Aircraft or Watercraft are used))

• Property In You Care, Custody or Control
  (Miscellaneous Equipment Props, Sets and Wardrobe, Physical Damage to Rented & Owned Vehicle, Aircraft, Watercraft, Third Party Property Damage, Negative Drives or Videotape, Your Office Contents or Film, Hard, Improvements or Betterments)

• Intellectual Property Rights Infringement
  (Errors and Omissions Liability)

• Claims Occurring or Brought Outside of the United States and Canada
  (Foreign Liability)

• Wrongful Termination, Sexual Harassment
  (Employment Practices Liability)

• Pollution
  (Pollution Liability)

Download PDF

AMA FAQ SHEET
For agents to pass on to artists

Why Crew Should be Processed through Payroll

This document is designed to be shared with your Artists to help them to make the shift from paying assistants as independent contractors (i.e. 1099) to processing them through payroll as employees.

Understanding the Employer/Employee Relationship: Compliance

• Depending on the state in which you are working, your relationship with your crew may be that of an employer/employee.

• Different states have varying tests to distinguish employees from independent contractors. For example, in California, with limited exception, a worker is considered an employee unless the worker (A) is free from the hiring entity’s control and direction in performing their work, (B) performs work that is outside the usual course of the hiring entity’s business, and (C) maintains an independently established business.

• When it comes to the IRS and the distinction between an employee and independent contractor, the main issue is “control”. The more control the principal (i.e., you) has over the crew’s hours, location and nature of the work, and the details of payment, the more likely it is the crew will be considered an employee. Click here for an IRS document that further explains.

Benefits of Using a Payroll Service:

• Reduced Liability: Think of an audit as a surprise check on your financial records. If something's amiss, there can be hefty fines. Using services like a payroll company safeguards you from potential missteps.

• Financial Savings: With fewer risks on your side, you could see a decrease in your Workers Compensation insurance costs.

• Stay Ahead: The industry's rules are ever-changing. By making this change, you're not only compliant today but prepared for tomorrow.

• Ease and Convenience: No more complexities of paying your crew directly. Let payroll experts handle it.

Please note: Consistency is key. It's an all-or-nothing approach. Either all crew payments are processed through payroll or none at all. Inconsistent methods might trigger unwanted attention like audits, and if you’ve misclassified employees as independent contractors you may be liable for back taxes and hefty fines.

What if my crew member doesn’t want to be classified as an employee?

Although we can understand their ambivalence, there are some benefits to being classified as an employee:

Advantages for Crew:

• Stress-free Tax Season: No more scrambling on April 15. Taxes are deducted consistently, making year-end simpler.

• Planning for the Future: Contributions to Social Security now mean potential benefits later.

• Financial Growth: Having a solid work and payment record can make things like getting a loan much easier.

• Safety Net: A clear employment history can be a lifesaver during unexpected times, like unemployment or crises.

FAQs for CREW

• Q: Can I avoid taxes being deducted from my paycheck?

• A: Unfortunately, no. Every employee must have tax withholdings. You will be required to fill out a W4 form and you will be able to select the deductions.

• Q: I have an LLC or S-corp. Does that automatically make me an independent contractor?

• A: Not necessarily. You may still fall under the "employee" category due to the nature of your job. It may be possible for an Artist to contract with your LLC/S-corp to “loan out” your services as an employee.

• Q: Why am I considered an employee now when I used to be an independent contractor?

• A: Employment laws vary from state to state, and change over time. Also, different Artists or Agencies may have different practices or knowledge. Some might not be updated on the latest regulations. It’s possible that the agency or company you were working for was unaware of this compliance issue and misclassified your employment status. It’s also possible that, since the compliance standards are frequently being updated—that you were eligible to be considered a contractor in the past, but aren’t anymore. Many Agencies are catching up with compliance and you will see this more often, throughout the industry.

• Q: I have an EIN. Does that change things?

• A: Not necessarily. An EIN alone does not mean you are an independent contractor.

Resources

Recommended payroll platforms Cast & Crew Advertising & Short Form Production (CAPS), ADP, Wrapbook to name a few.

Download PDF

The AMA Insurance Glossary is meant to provide clarity of terms that are commonly references when discussing Insurance.

Thank you to AMA Partner, Taylor & Taylor for providing this Glossary

View more
Download PDF