23 Nov What is a Completion Bond?
Many important movie productions would never have been screened without the assistance of a completion bond. A completion bond is a specialized filming insurance product that is used to insure a production. It is designed to protect a person or company that has a financial interest in a film – for example, investors, a bank or a film distributor – for the completion of the film.
Independent film productions that are not backed by major film industry organizations often carry this type of filming insurance to ensure that funds are available to make their films. The financial backers of a film may insist on a completion bond as a condition of investing in a film; investors are able to redeem the bond if the production is not completed. The company providing the bond does not guarantee the quality or financial success of the film but if does offer some financial protection to those with a financial interest in the completion of the film.
A bonding company obviously is intensely interested in ensuring that a film is completed. The people on the staff of a bonding company are usually experienced film industry professionals who know all about the technicalities of film production and are extremely knowledgeable about the costs of every aspect of film production. The bonding company may have to be creative to avoid having to pay the bond: Given the option of abandoning the film or fixing a major production problem, the bonding company will go to extreme lengths to help the producers to complete the movie.
As special effects have become more sophisticated and moviegoers’ expectations have risen, there have been massive increases in the cost of film production and the level filming insurance coverage needed for film projects.