Spotlite Claims Q&A: AI a ‘learning curve’ for insurers in entertainment industry

Insurance Times spoke to Marion Jones, director of Spotlite Claims, about how evolving technology is changing risk in the entertainment industry from an insurer’s point of view and how claims are managed in the sector.

Following the end of a long strike in the US that saw studios close down, what risks could emerge as work restarts?

There will be demand for studio space, demand for cast and skilled crews, as well as demand for equipment.

If we tackle studio space first, there is already a lack of space across the whole of the industry globally to create the amount of content the viewing public is demanding. The risk is that with studios already booked up for the autumn and winter filming schedule, new locations are sourced and used without fully understanding any construction risks, such as the presence of asbestos in a disused warehouse.

Cast and crew will also be working to very tight schedules, so there may be a temptation to cut corners leading to a rise in claims. It’s also important to recognise that there is a real skills shortage in films crews, which means there could be a temptation to bring in underqualified and inexperienced people to operate equipment, creating additional risks.

What claims do you deal with at Spotlite?

Spotlite Claims supports three main areas in the entertainment industry – global film and TV production, advertising and event cancellation and non-appearance.

In film and TV, we deal with a huge variety of claims under global film and TV production package policies for property damage and schedule interruption. It could be a major studio fire or failure of equipment, props or wardrobes. Large, complex claims will often encompass property, liability, business interruption elements and potential subrogation considerations.

Our claims support for advertising tends to be for property and media, as well as non-appearance and death and disgrace. Our linguistic skills to handle claims for French, German and Spanish brands, agencies and production companies are hugely valuable in this field.

Managing claims for event cancellation and non-appearance policies sees us supporting UK and international artists, promoters, festival organisers and theatre producers. As you would expect, there were a high volumes of claims during the Covid-19 pandemic. Our experience in this market going back 30 years meant we were able to deal with these claims quickly and efficiently.

Wrapped up in event cancellations is adverse weather policies, so we look after claims for both short-term photographic adverse weather policies and policies covering specific events such as sporting events and Christmas light shows anywhere in the world.

How much is technology changing risk from an insurance perspective in TV and film?

The use of new and emerging technologies, such as virtual production (VP) and artificial intelligence (AI), is creating a new set of potential risks to which the film industry itself is only just adapting. It is a learning curve for both producers and insurers as film crews get to grips with how the new technology works. The right protocols will need to be put in place to manage the new risks and avoid costly claims.

VP could bring about a decline in some personal injury claims but new injuries and illnesses such as motion sickness and epilepsy may rise. Cyber threats could become an issue as VP is all about digital assets and data.

Copy-written material and intellectual property belonging to a third party incorporated into the VP process could also pose a risk of unintentional infringement and law suits. Then we need to consider that errors or mistakes by CGI artists, technicians, or the virtual art department can also lead to financial losses or claims for negligence.

Finally, VP requires large amounts of technical equipment ranging from LED volume screens to farms of computer hard drive towers and miles of cabling. When this equipment is damaged or breaks down, it will of course need to be repaired or replaced.

Can technology such as AI help manage claims more effectively?

Absolutely. A typical scenario would be where an actor is unable to complete their last day of filming on a foreign location due to illness. Rather than extend the foreign shoot and rearrange everyone’s travel, if the production is returning to shoot in a studio in the UK and has access to a VP stage, they can capture plate shots on the foreign location and shoot the action on the VP stage.

AI deep fake can also help with head and voice replacement in some scenarios where an actor is indisposed.

How much does weather-related incidents impact losses in the entertainment sector?

Weather risks that pose an imminent peril to crew and property, particularly mobile and elevated working platforms, are an increasing feature of the claims we manage at Spotlite Claims.

Unusual weather patterns, such as unexpected snow, are also giving rise to claims for failure to access locations or inability to film safely. Insurers are doubtless looking closely at their exposure and recent loss history and we expect to see some changes in the available cover over the next few years. 

How has Spotlite created the skills to act as loss adjusters in this specialist market?

Our team includes specialists with a specific TV, film and events background such as production accountants, lighting and camera equipment specialists. This means we are intimate with the machinations of each industry and can talk to the insured in their language and understand their needs.

However, we know that along with gaining qualifications, experience in loss adjusting is everything and so we make sure we expose our adjusters to a variety of claims from early on. We are also very entrenched in the film and TV industry, which ensures we keep abreast of the latest developments.

Given the pace of technological change, this is crucial. It was very telling that a British Film Institute event I attended recently on AI was fully subscribed. The same event attracted a fraction of this number a few years ago.