A Completion Bond is a Film Investor Insurance. Some call it "Completion Guarantee" or "Bond". In the Entertainment Industry it protects a Film. The Insurance Product acts as a financial guarantee. This security benefits the providers of a film's finances.
A Film Bond guarantees delivery of a Film on Budget and on Schedule. The Completion and Payment Guarantee makes sure the project will be completed. It covers exceeded Budgets and delayed Delivery. The Guarantor will assume many of these related risks.
An independent film production takes time to mature. This is never a spontaneous event. A Film Production combines strategy, planning and substantial funding. Investors expect a financial benefit from the Film. The Insurance Company provides security for the Investors.
It is a line of defense against problems arising during production. The Completion Bond provides solutions to many of those issues presented.
Party to the Completion Agreement
Party to the Completion Guarantee (Beneficiaries/Loss Payees)
The Insurance Company
Note: The term Financier includes Private Investors, Debt Financing, Gap Financing, Film Funds (Tax Incentives, Tax Credits), and Product Placement investments.
Issuing a Bond signals that a film project might be sound. The non-issuance of a Bond can be a warning towards the project.
A Completion Bond protects investments into a movie in 4 different ways:
Delivery of the Production according to specification. This includes script, budget, schedule, key cast and crew.
If required, take over Production to ensure meeting the specification.
Loan excess costs to the Production, if required to Complete and Deliver.
Repay the film's financiers, if there is no Completion or Delivery.
From initial contact to final delivery — here's how it works:
Contact through the Broker
Review of Production Documents
Insurance Approval & Agreement
Active Production Oversight
Final Production Delivery
For Film Completion Bond Insurance you (the project owner) approach a Broker. You can talk to one of our Completion Guarantee Brokers below. Else contact your trusted Media Broker who typically supplies your FPIs. A search engine will provide an Entertainment Broker in your country.
The Broker starts the conversation on this European offer for Film Bonds.
The Bond Guarantor tasks the Risk Management with an assessment of the production. Some of the first documents that are looked at are:
Underwriting has 4 phases:
A Film Completion Bond oversees the financial make-up of a Production. It is an audit of the full Production. This includes monitoring Pre-Production, Post-Production and Delivery. Monitoring Production and Delivery is a continuous process. During the Period of Cover the Insurer requires constant information. Guaranteed Completions' Risk Management Team acts as this Supervising Entity.
The Completion Guarantor can provide additional funds to Complete and Deliver the bonded film. Otherwise it can abandon the Production. Abandonment might lead to repayment of spent funds. Parties will receive payment to the extent covered by the Completion Bond.
Delivery on Time is part of a Completion Guarantee cover. The Completion Guarantor has legal power to control the Delivery. It secures the timeline the Investor agreed to in the first place. Delayed Delivery resulting in non-payment of a Distributor can become a Bond claim.
Delivery to various Distributors follows Post-Production. Delivery includes audio-visual files and supplemental records. The industry calls insured items "Bonded Delivery Items". A Distributor's non-acceptance triggers a Guarantor's liability.
Acceptance in a technical fault-free state is important to Financiers. Distributor's final payment obligations are contingent on it. This returns substantial rates of production loans.
Accepted Delivery concludes a Guarantor's duty.
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 2-3 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.
A Bonding company requires that the production protects itself against common risk occurrences with production insurance cover:
Your Film Insurance Broker can provide quotes, coverage details, and guidance on deductibles and exclusions.
While a Film Bond protects the financial interests of Investors and Lenders, it does not guarantee:
✗ The quality of the Production
✗ Financial success at the Box Office
The bond ensures completion and delivery, not commercial performance.
A Film Completion Bond is available globally. Some countries may have restrictions due to political or financial country risk.
Common Co-Production Partners:
Europe (Germany, Netherlands, Spain, Italy, France), United Kingdom, United States, Canada
Completion bonds originated in the construction industry, where they protect construction loans by guaranteeing builders complete projects on time and on budget. Also known as construction bonds or performance bonds.
