sony pictures entertainment inc. february 14, 2014

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Sony Pictures Entertainment Inc. February 14, 2014

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Page 1: Sony Pictures Entertainment Inc. February 14, 2014

Sony Pictures Entertainment Inc.February 14, 2014

Page 2: Sony Pictures Entertainment Inc. February 14, 2014

2

MISSION STATEMENT

PROTECT THE ASSETS OF SONY PICTURES ENTERTAINMENT

Page 3: Sony Pictures Entertainment Inc. February 14, 2014

3

RISK MANAGEMENT STRUCTURE

Janel ClausenVice President,

Risk Management

Aaron AuCoordinatorWork Comp

Claims &Admin Support

for Dept.

Douglas Hastings Claims Manager

GL, Auto, Property & Production

Claims

Dawn Luehrs Director

Global Production Risks

Donna TetzlaffDirectorGlobal

Corporate Risks including

Distribution Activities Britianey Barnes

Sr. AnalystGlobal Production Risk

Support, Bonds & Notary

Kate Calabrese Claims/Systems,

ManagerMedia Liab. Claims,

EPL Claims, Dept. Budget & Risk

Mgmt Systems

Page 4: Sony Pictures Entertainment Inc. February 14, 2014

4

Risk Management and Insurance Strategy

Central to our role as SPE’s Risk Management Department is the rigorous process utilized to assess SPE’s exposure to risk on a long term strategic basis and day-to-day project basis.

Inherent to anticipating and proactively addressing SPE’s risk exposures, we:

• Understand SPE’s objectives in designing and implementing a superior insurance program, using specialized professional resources as needed, in formulating cost efficient risk management and insurance solutions.

• Formulate action plans to leverage SPE’s strengths and opportunities of SPE’s risk techniques relative to overall financial and operational conditions, the business environment as well as insurance market conditions.

• In partnership with our Internal Group Contacts and External Risk Management Professionals, we continually identify / evaluate opportunities and threats which arise and implement processes and procedures to address them.

Examples of Risk Management Functions:• Develop, negotiate, and maintain insurance programs for global operations • Claims Management for Global Operations• Maintain insurable asset inventory and exposure data• Allocate risk costs to the Studio, each Production and all other groups• Executive Management Reports

Page 5: Sony Pictures Entertainment Inc. February 14, 2014

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Auto LiabilityInsures SPE when legally liable for bodily injury and/or property damage to another party caused by an SPE owned/hired or non-owned vehicle

General Liability

Protects SPE against another party's bodily injury and/or property damage claims arising out of SPE's premises; operations; products and completed operations due to SPE's negligence.

Foreign Auto / General Liability

Policy covers same insurance as above

US Workers' Compensation &

Employer's Liability

WORK COMP - provides no-fault statutory benefits for employees due to a job-related injury (including death) resulting from an accident or occupational disease

EMPLOYER'S LIABILITY - pays on behalf of the employer all sums that the employer becomes legally obligated to pay due to a job-related injury (including death) resulting from an accident or occupational disease caused by the employer's gross negligence.

Foreign Work Comp &

Employer's Liab

Same coverages as US above

Non-Owned Aviation Liability &

Hull

Covers SPE when SPE is legally obligated to pay for bodily injury, (including death) and /or property damage to another party arising out of the maintenance or use of an owned or non-owned aircraft. Hull Coverage included. Pays for physical damage to the owned or non-owned aircraft.

Media Liability & Technology Errors

& Omissions

MEDIA LIABILITY - Protects SPE against third party infringement, (copyright/trademark) claims regarding SPE's created content produced and/or distributed by SPE through any medium.

TECHNOLOGY ERRORS & OMISSIONS - insures against third party liability claims against SPE relating to SPE's business activities of build, modify, supply, install, deliver and provide entertainment related software and technology services; i.e., interactive games, post production services, web hosting & design and related customer support, maintenance consulting and training.

Cyber Liability

Insures SPE against third party claims for network security breaches as respects corporate confidential and data privacy information.

Global Property

Property insurance against physical loss or damage of SPE's physical assets due to perils such as fire, lightening, vandalism, malicious mischief, water damage, earthquake & flood. Policy also provides insurance for loss of business income and extra expense

Production Package

Insures SPE's productions against losses of property & business interruption due to injury or illness of a covered artist; damage or loss of equipment; props; sets; wardrobe; physical damage to production vehicles and third party property damage

Boiler & Machinery

Covers SPE for physical damage or loss caused by a sudden and accidental breakdown of SPE's boilers and machinery equipment, HVAC or any other equipment.

Employment Practices Liability

Protects SPE from claims brought by employees arising out of discrimination, wrongful termination; sexual harassment.

D&O LiabilityCovers SPE's directors & officers, or management equivalent for acts of errors or omissions committed in their capacity as Ds & Os or management equivalent of SPE and SPE subs

CrimeCovers SPE for employee theft or dishonesty acts, loss of money & securities, depositor's forgery, robbery, embezzlement.

Fiduciary Liability

Covers errors & omissions of SPE's trustees, employers, fiduciaries, professional administrators as respects the administration of employee benefit programs.

Employed Lawyers Errors &

Ommissions Liability

Covers SPE when SPE is legally obligated to pay damages arising from a claim for wrongful acts of its corporate attorneys but only when SPE cannot legally indemnify the corporate attorney.

Special Crime

Protects all of SPE's Ds & Os, employees, leased or temporary employees, students, volunteers, loan outs, independent producers, employees paid by a payroll service company, consultants…for perils of Kidnap, Ransom and Extortion.

Terrorism

Insures for physical loss or damage for acts of terrorism or political violence, (Political Violence is physical loss or damage due to a government action: e.g., confiscation, expropriation, currency inconvertibility)

Marine Covers non-owned watercraft liability, physical damage on hull and owned vessel pollution.

Ocean Cargo

Cover overseas shipments of property & equipment.

Glossary of Insurance Coverage

Page 6: Sony Pictures Entertainment Inc. February 14, 2014

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Production Risk Management – A Dynamic Process

Pre-Production

Initial Production Notice to Risk Management – Weekly Production & Business Affairs Meetings, Online Publications, Phone Calls

Script Review, Exposure and Location Analysis – Domestic/International determination

Cast declarations, medicals, stop dates and cast multi-production utilization

Budgeting –Finalize Insurance line, Identify special insurance extensions – cast (age, medical etc.), marine, aviation, railroad, automobile, stunting, international, disability, duration of production

SEHS Coordination

Post-Production

Additional Filming and Re-Shoots

Claims Finalization

Annual Production Renewal Process

Production

Adapt to changes in pre-production schedule

Location changes

Contract Review – Standard SPE/Non-Standard, Vendor, Supplier and amendments to Insurance Policies and Insurance Certificates as needed

Claim activities

Special Hazard Identification and Insurance treatment

• Watercraft• Aviation• Stunting• Railroad• Automobile

SEHS Coordination

Page 7: Sony Pictures Entertainment Inc. February 14, 2014

7

Corporate Risk Management – A Dynamic Process

Global Insurance Renewal Process

Activities begin 120 days before renewal and varies by coverage (Property, Casualty, E&O, D&O, Marine, Aviation, etc.)

Collect exposure data from SPE entities (values, payrolls, productions costs, sales, vehicles)

Update claim summaries/status by line of coverage

Partner with broker to finalize submission and renewal program design and negotiation strategy

Meet with insurers as necessary

Monitor renewal progress and respond to insurer requests

Analyze insurer proposals and make recommendations to SPE management

Implement renewal and coordinate certificate issuance, reviews and approves insurers’ premium invoices for payment.

Manage ongoing relationships with brokers and insurers until subsequent renewal cycle (e.g. Tokio Marine – major strategic partner)

Risk Management Analysis and Administration

Identify corporate global risk exposures• Review contracts, leases, agreements• Monitor changes to locations, human

resources, inventory and warehouses• Assess impact of insurance laws and

requirements by country of operation• Due diligence for mergers & acquisitions

Analyze insurance solutions for new/changing exposures

• International• Media• Terrorism• Cyber Risk• Surety Bonds

Respond to internal SPE inquiries (e.g. clearance procedures, claims, INFOSEC, legal, SEHS)

Coordinate insurance responses for promotions, sales, marketing, distribution, studio operations, digital, the internet

Ongoing claim management

Manage annual insurance budget

Page 8: Sony Pictures Entertainment Inc. February 14, 2014

8

Contract reviews• Corporate (200)• Productions Domestic and Foreign(1,500 per year)

Coverage Requests (600 per year)• Scope, limits, extensions, amendments

Outgoing Certificates Issued and Reviewed (3,000 per year)• Same Day Issuance• Notice of Cancellation Compliance

Incoming Certificates Reviewed (600)

Special Endorsements (2,000 per year)• City Specific Additional Insured – General Liability• Specific Vendor Additional Insured – General Liability• Notice of Cancellation – General Liability• Additional Insured – Media Liability; Errors & Omissions

Policy Renewals• Gather and transmit renewal data to insurer for negotiations• Policies reviewed to verify terms and conditions match quotations received• Policies summarized updated and maintained

Claims Management• Assist Productions and other SPE Businesses in reporting all claims• Assist in resolution of difficult or unusual claims

Ongoing Cross-Team communication

SPE Risk Management: The Day-To-Day

s:file path

Page 9: Sony Pictures Entertainment Inc. February 14, 2014

9

SPE Risk ManagementBroker Relationships Risk Assessment – conduct annual review of SPE’s risk profile, highlighting changes which could impact coverage

requirements.

Quantitative Analysis – assess recent and historical loss trends. Emphasize improvements which can result in deductible / structure improvements

Benchmarking of Insurance Markets – annual assessment is undertaken to identify best-in-class insurers capable of responding to the SPE Risk Management Standards.

Program Negotiation – negotiate optimal program structure with cost effective balance between deductibles and premiums. Program must provide the most comprehensive coverage with the flexibility to respond quickly to SPE’s inherent and contractual exposures.

Day-to-Day Administration – timely and accurate responses to SPE’s unique day to day requirements.

Page 10: Sony Pictures Entertainment Inc. February 14, 2014

10

SPE Risk Management Underwriter Relationships Long standing and beneficial partnerships with Fireman’s Fund and Tokio Marine Nichido Fire and Insurance Co.

developed over time.

Production Package market is limited and Fireman’s Fund has been identified as a preferred partner• Have $250,000,000 per picture capacity available• Provide rating structure that keeps costs low• Works closely with SPE on difficult placement issues• Appreciates our Risk Management approach

Tokio Marine has been a preferred partner since the Sony acquisition and participates on major portions of the property & casualty programs• Appreciates Risk Management approach and provides solutions to production liability coverage not easily

obtained from other markets.• Includes hard to obtain coverage for production risks in basic policy:

Stunt activities including driving Pyrotechnics Will include loan outs & independent contractors as additional insureds

Hiscox has emerged as a strategic partner for the specialized Media Liability risks of SPE

Insurance Company providers are continually assessed for their financial stability and a long term commitment to the Entertainment Industry

Page 11: Sony Pictures Entertainment Inc. February 14, 2014

11

Risk and Insurance Total Cost of Risk – Fiscal Year 2012

Premiums: $15,000,000

(includes all U.S./Canada and Master International)

Retained Losses: $4,500,000 Estimated

(includes: auto, general liability, workers compensation, errors & omissions/media and cyber, production)

Exposures • Revenue: $7,900,000,000• Property Assets (Total Insured Values): $1,920,000,000

(Replacement Cost including Business Interruption + Extra Expense)• Workers Compensation Payroll (subject payroll): $733,389,809 (Head Count 4,568)• Insurable Production Cost: $800,000,000

(TV, MP, Home Entertainment, Digital and Studio)

Protection• 18 Major Lines of Coverage• Over 40 Underwriters providing over 70 Policies plus numerous local and international policies for non-

US production offices

Page 12: Sony Pictures Entertainment Inc. February 14, 2014

12

Annual Total Casualty Premium/Retained Losses vs. Total Annual Revenues – 2006 thru 2012

2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

Annual Premium

10794858.6666667

15200836.7666667

13347348.6666667

13939807 13105103 14840956

Retained Losses

10316872 22270899 4347458 7818441 8965623 4443217

Revenues (in 000)

8000000 7500000 7700000 7500000 7000000 7900000

$2,500,000

$7,500,000

$12,500,000

$17,500,000

$22,500,000

$27,500,000

$32,500,000

$37,500,000

$6,500,000

$6,700,000

$6,900,000

$7,100,000

$7,300,000

$7,500,000

$7,700,000

$7,900,000

$8,100,000

Sony Pictures Entertainment IncAnnual Total Premium & Retained Losses vs. Revenues

2006 thru 2012

Fiscal Year Pre

miu

m &

Lo

sse

s

An

nu

al R

ev

en

ue

s (i

n 0

00

)

$21,111,731

$37,471,736

$17,694,807

$21,758,248 $22,070,726$19,284,173

Note: 2007-08 period includes Spiderman/Marvel E&O Claim

Page 13: Sony Pictures Entertainment Inc. February 14, 2014

13

Annual Workers’ Comp Premium/Retained Losses vs. US Headcount – 2006 thru 2012

2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

PREMIUMS

722005 627875 662681 431715 407982 426164

RETAINED LOSSES

1142000 1199000 1340000 1344000 1289000 1367000

HEADCOUNT

5222 5677 4788 4626 4507 4568

$250,000

$750,000

$1,250,000

$1,750,000

$2,250,000

500

1,500

2,500

3,500

4,500

5,500

Sony Pictures Entertainment Inc.Annual Workers' Comp Premium and Retained Losses vs. Domestic

Headcount2006 thru 2012

Fiscal Year Tota

l P

rem

ium

& R

eta

ined L

osses

Headcount

Page 14: Sony Pictures Entertainment Inc. February 14, 2014

14

Annual Global Property/B&M/Terrorism Premium/Retained Losses vs. Property Values – 2006 thru 2012

2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

GLOBAL PROP/B&M/TERR PREM

3977379 4590306.1 3680890 3695921 3950880 4330010

RETAINED LOSSES

150000 150000 50000 50000 0 50000

PROPERTY VALUES (in 000)

1753896 1831736 1921700 1918542 1981686 1926487

$500,000

$1,500,000

$2,500,000

$3,500,000

$4,500,000

$1,625,000

$1,675,000

$1,725,000

$1,775,000

$1,825,000

$1,875,000

$1,925,000

$1,975,000

$2,025,000

Sony Pictures Entertainment IncProperty Premiums & Retained Loss vs Total Values

2006 thru 2012

Fiscal YearAn

nu

al

Pro

perty

Prem

ium

s &

Lo

sses

Pro

pert

y V

alu

es (

in 0

00s)

Note: An aggressive marketing effort at locking in rates for multi-year programs proved beneficial during several years of natural disasters

Page 15: Sony Pictures Entertainment Inc. February 14, 2014

15

Annual Production Package Premium/Retained Losses vs. Net Insurable Production Costs – 2006 thru 2012

2006-2007

2007-2008

2008-2009

2009-2010

2010-2011

2011-2012

2006-2007

2007-2008

2008-2009

2009-2010

2010-2011

2011-2012

PACKAGE PREMIUM

1719086

5401540

4453435

5342573

4358758

5277797

RETAINED LOSSES

1202357

2741860

1201288

4211947

2825819

1809762

PRODUCTION COST

238814444

992143112

721306940

1149266874

541189554

792148117

$1,000,000

$3,000,000

$5,000,000

$7,000,000

$9,000,000

$11,000,000

$100,000,000$300,000,000$500,000,000$700,000,000$900,000,000$1,100,000,000$1,300,000,000

Sony Pictures Entertainment IncTotal Annual Production Package Premium & Retained Losses

vs. Insured Production Cost

Fiscal Year

Productio

n P

ackage P

rem

um

&

R

etain

ed Loss

Productio

n C

ost

Page 16: Sony Pictures Entertainment Inc. February 14, 2014

16

Casualty, Property and Executive Risk

Financial• Collateral reduction of $900,000 in 2012• Implemented International Master Control Program 2010-2013; savings of $243,000• Workers’ Compensation program moved from ACE to Tokio Marine in 2010 after aggressive marketing in

2009; saving $900,000• Work Comp Medical Bill Review pricing shifted from percentage (25%) of savings to per bill ($12.50).

Estimated cost savings in excess $100,000

Major Insurance Claim Settlements• Marvel - $3,000,000• SPE Cyber Attack - $400,000• Grouper - $15,000,000• Pinewood - $15,000,000• Crime and Employment Claims –$1,400,000

Program Enhancements• Lowered Workers’ Compensation deductible from $750,000 to $500,000

• Increased CA Earthquake Coverage from $70,000,000 to $100,000,000

• Increased Property Program Loss Limit from $400,000,000 to $500,000,000

• Cyber Liability program was separated from the Multimedia/Technology program and now have a separate $20,000,000 limit with expanded coverage

• Cyber Liability amended to provide coverage for the care, custody and control of Third Party Intellectual Property Assets

Risk and Insurance Strategy: SPE Risk Management Achievements

Page 17: Sony Pictures Entertainment Inc. February 14, 2014

17

Risk and Insurance Strategy: Sampling of SPE Risk Management Achievements

Program Enhancements (cont.)

• Terrorism Coverage - Expanded Policy Form to include Coverage For Political Violence; Secured Coverage For $193,000,000 International Office Schedule at No Charge; Expanded Policy To Provide $1,000,000 in Coverage For Previously Excluded Territories (War Risk when declared)

• Regular testing of Broker Offerings with RFP's in 2007 and 2011• Maintaining experienced staff while developing new staff assuring quality service continuity with regular

staff evaluations and goal setting• Unique claim settlements (Pinewood property claim, certain E&O claims, 9/11 Civil Authority)• Implementation of Risk Management Information System (RMIS)• Reduction of Cost of Risk over the last few years despite upward cost pressure from insurers• Production Program              

Cast clearance extensions negotiated for higher risks                    Anna Nicole Smith                     Grown Ups 2                       London Calling Michael J. Fox Project One Direction         

Increased coverage for Ingress/ Egress (relevant for Hurricane Sandy claims est. $300,000)                 2013 renewal enhancements:                    

Premium savings of $900,000                      Increased sub-limits for civil authority                      Increased covered artists from 20 to 25

Page 18: Sony Pictures Entertainment Inc. February 14, 2014

18

Insurance CombinationOpportunities/Challenges

Challenges

Relative to risk exposures-most types of insurance purchased by SPE would not generate positive leverage by combining with SCA

• SPE Property Program consists of significant values in California providing coverage with finite amount of Earthquake limits available which would be diluted if combined with SCA values particularly in California

• Types of Property insured by SPE significantly different than those of SCA (SPE’s sound stages vs. SCA’s HPR manufacturing/distribution locations)

• SPE Workers’ Compensation and General Liability coverages would not be viable lines of business to consider combining because of the unique film production exposures

• Cyber Liability policy has been drafted specifically for SPE’s risk profile along with coverage for the care, custody and control of any third party intellectual property assets (not combinable due to market relationships and exposures)

• Media/Technology policy has been drafted to the specific needs and requirements of SPE and its contractual requirements (not combinable due to market relationships)

• Production Package policy is unique to SPE covering motion picture and TV production ( could roll in SME’s video production activities)

Opportunities

Opportunity to combine due to commonality of exposures for these coverage lines:

• Umbrella

• Fiduciary

• Directors and Officers

• Employment Practices

• Employed Lawyers

• Crime

• Kidnap, Ransom & Extortion

Due to minimum premium levels, combination savings would be modest and result in a dilution of limits.

Note: Maintaining broadened definition of insured and on-location extensions of coverage are important

Page 19: Sony Pictures Entertainment Inc. February 14, 2014

19

Appendix

Page 20: Sony Pictures Entertainment Inc. February 14, 2014

20

SPE Business Partners & Resources

Procurement Legal/Litigation

Business Affairs Studio Operations & Facilities

Real Estate Corporate Safety/Security & Environmental Affairs

Information Security Compliance

Corporate Communications Information Technology

EIS Infrastructure Marketing & Publicity for MPG/TV and HE

Digital Group – SPI, SPII, SPA, SP Technology Production Acquisitions for Sony Pictures Classics, Worldwide

Corporate Acquisitions and Mergers Corporate Events

SCA/SEL/SME Risk Management Finance

Medical Department People & Organization

Transportation Tax

Labor Relations Home Entertainment

Post Production International Groups

INTERNAL

Page 21: Sony Pictures Entertainment Inc. February 14, 2014

21

SPE Business Partners & Resources

Adjusters Artists

Business Managers Attorneys

Physicians/Nurses Studio Risk Managers

Insurance Brokers & Carriers Appraisers

Vendors/Contractors/Consultants Investigators

Muni/Government Agencies Finance Companies

EXTERNAL

Page 22: Sony Pictures Entertainment Inc. February 14, 2014

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CYBER ISSUES: In 2011, SPE’s Cyber Insurance was included in the Media Liability Policy.

SPE experienced a breach on June 2, 2011 through the sonypictures.com website. Claims expense was $1.6 million.

Due to our claim and several other significant cyber claims, our underwriters made the decision to get out of the Cyber Insurance arena.

INTERACTION: SPE Risk Management gathered data for three insurance applications. Before starting the marketing and quoting process, SPE Legal needed Non-disclosure Agreements (NDAs) from the three insurance companies involved in quoting. Applications were prepared by SPE Risk Management with assistance from InfoSec, Legal Compliance and Litigation. Other required information was also compiled and submitted to the insurance companies with the application (i.e., Sony Global Basic Principles on Personal Information, and samples of third party agreements.

After submission was received by the insurance companies, Risk Management facilitated many meetings and conference calls over a three month period. Participants were SPE Risk Management, InfoSec, Legal Compliance, Litigation, Lockton and the underwriters from the insurance companies. Discussions included private information (credit cards, bank accounts, social security numbers); systems security; how information is collected, stored and monitored; and breaches (including procedures after a breach is discovered). These meetings also addressed Ultraviolet and Media Cloud Services and third party content that SPE has in its care, custody and control for outside studios and production companies.

RESOLUTION: As a result of our efforts, we were successful in obtaining a program through Brit Syndicate, Liberty Mutual and Beazley for $20 million in limits with a $10 million self insured retention.

It is important to note that this policy includes coverage for third party content in our care, custody and control. This is a difficult risk to insure and new to the insurance market.

SPE personnel involved in obtaining coverage:

Janel Clausen & Donna Tetzlaff - SPE Risk ManagementLen Venger - SPE LitigationOphir Finkelthal – SPE Corporate LegalJason Spaltro, David Lin and Danny Chi from SPE InfoSecCynthia Salmen and Courtney Schaberg – SPE ComplianceEmily Freeman – Lockton, SPE’s insurance brokerUnderwriters from Brit, Liberty Mutual & Beazley

Corporate Example – Cyber Insurance

Page 23: Sony Pictures Entertainment Inc. February 14, 2014

23

INTERACTION Shailene Woodley - Stop Dates & Hazardous Activities -Risk Management first notified during pre-production phase that artist needed to learn how to ride a motorcycle and that she would be performing in another production.

Worked with Producer, Denise Pinckley & Stunt Coordinator, Andy Anderson to obtain training info, i.e. current experience, anticipated activity, training schedule.  This type of information needs to be very detailed, i.e., speeds, where, who is training, what is involved, make sure the safety group is aware. Carrier requested their Executive Director Loss Control, Paul Holehouse review documentation & coordinate with our safety team

To lift stop date – need day out of days report and activities for both shows; are there any shoot around possibilities.  To reduce deductible for motorcycle riding, need average daily shooting costs; shoot around possibilities; scenes riding in, etc. Andrew Garfield, Emma Stone, Jamie Foxx, Dane DeHaan – all had stunting exclusions in addition to a medical issue for Emma Stone.  Resolved by soliciting the help of production, the carrier, our broker and Sony’s internal Motion Picture team (Michael Marshall, EVP Business Affairs; Deb Bruenell, Sr. VP Legal; Debra Bergman, VP Production Administration; Pete Corral, Sr. VP Production Administration; John Clements, Exec Director, Production Loss Control

CAST INSURANCE ISSUES

There are broad exclusions built into SPE’s production package policy, these include Stop Dates (when an artist needs to be released to another production), and participation in Stunting and Hazardous Activities. To the extent there is an exclusion imposed by the underwriters, Risk Management needs to work with everyone involved to get the exclusion waived. London Calling aka Amazing Spider-Man 2 is an example of the process to secure full coverage. Notification - Underwriters receive notification of possible excludable cast situation by various methods. Risk Management gives verbal or written notification or Cast Medical paperwork identifies an issue (e.g. hazardous stunt activities, pre-existing medical conditions, participating in other projects at the same time.)

Example - Shailene Woodley’s Medical exam revealed – Stop Date issue as well as hazardous activities, i.e., motorcycle riding

First result - $2MM deductible for any loss due to training, practicing & riding motorcycle.

RESOLUTION

Shailene Woodley’s issue took nearly 3 months of back and forth discussions before getting a positive resolution. The end result was lifting the stop date restriction and acceptance of a one day deductible (equivalent to $500,000) for motorcycle riding during production.

All other artist restrictions were removed following the same process.

Production Example – London Calling

Page 24: Sony Pictures Entertainment Inc. February 14, 2014

24

Production Claim Example – Steiner Studios

INTERACTION Shortly after being notified of the loss, SPE Risk Management coordinated a conference call to discuss the details of the claim.  On the call were production executives, production accounting, our insurance adjuster, our insurance broker, and SPE Risk Management. 

A claim was put together by the show executives and accountants. It was then submitted to adjusters for insurers.

ISSUES

An insurance claim was filed on behalf of an SPE television production Made in Jersey for damages sustained at a production studio due to Hurricane Sandy.  The lease agreement with Steiner Studios made the show responsible for all equipment owned by them being used on our show. Damaged were various pieces of equipment totaling more than $100,000.

RESOLUTION

Nearly four months after first learning of the loss, we were able to successfully resolve the claim for the entire amount of the claim; $ 102,289. Involved in the claims resolution process were:Janel Clausen, Douglas Hastings – SPE Risk ManagementJohn Morrissey – SVP, Production (SPE)John Machione – Unit Production ManagerBeth Zagrany – Accountant, Made in JerseyBlake Drummond – Production CoordinatorNathan Haramoto – Director, Production Accounting (SPE)Paul Giesinger – Finance Manager (SPE)Steve Leedecke – Partner, Claim Specialists International Ltd.Susan Feehan – Vice President, Aon/Albert G. Ruben Insurance Services, Inc.Marla Glover – Property Adjuster, Fireman's Fund Insurance CompanyJohn Eddey – Vice PresidentDenise Wheeler – Controller