On March 31, 2020, Sarah Cronin was quoted in the Los Angeles Daily News regarding the legal and financial ramifications that the entertainment industry will face as a result of COVID-19, as production delays inflate budgets, pushed-back release dates throttle cash flows, and sped-up jumps for some theatrical films to home video release make a mess of income and talent remuneration formulas.
"For the film and television industry’s productions that have been shut down, studios and producers are going to be looking at specific insurance policies that are put in place for a specific television or movie production," explained Cronin.
"Those policies have different elements to them that will cover such things as if a set collapses or if a cast member gets sick and can no longer participate in the production. Sometimes they have what’s referred to as civil authority coverage, which could be particularly applicable right now, which is if you have a government-issued order saying people can no longer congregate and productions can no longer continue," she added.
Additionally, decisions made to generate some income from completed movies during this extraordinary coronavirus situation could trigger investor suits over lost profits that could have been generated if, say, more was charged for a digital rental or the studio had waited for theaters to reopen. Cronin explained that such exposure could be covered by a studio’s errors and omissions insurance policy, though such contracts aren’t usually intended to cover lost profits.
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