How Not Having Workers' Comp for Your Production Can Get You Sued (Or Worse)

Accidents happen during productions. Things can get hectic and one loose wire can change everything in a matter of seconds. The solution? A comprehensive worker’s compensation insurance or workers’ comp policy.

As a producer, it’s your job to make everything for production is taken care of, and getting the proper production insurance for your workers is part of the process. Without insurance, specifically worker’s comp insurance, you could face legal and financial ramifications that can end your production and negatively impact your career.

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What is Workers’ Compensation Insurance?

Workers’ compensation insurance, also called workers’ comp, provide your talent and crew with the benefits or medical care they need if they experience an injury or illness related to the job.

If someone is injured on set, worker’s compensation insurance can provide financial assistance to cover the cast and crew’s medical bills and rehabilitation expenses. This coverage usually applies to full-time employees but it’s also advisable for your worker’s comp insurance to cover independent contractors working on the production.

Accidents happen during productions. Things can get hectic and one loose wire can change everything in a matter of seconds. The solution? A comprehensive worker’s compensation insurance policy.

What is Workers’ Compensation Insurance?

Workers’ compensation insurance, also called workers’ comp, provide your talent and crew with the benefits or medical care they need if they experience an injury or illness related to the job.

This type of insurance can also prevents producers (cough, cough, you) from being sued.

Is It Illegal to Not Have Workers’ Comp?

It depends on the state you’re in. For example, Texas doesn’t require employers to have worker’s compensation insurance. California, on the other hand, requires that every employer have worker’s compensation benefits if they hire one or more employees under the California Labor Code Section 3700.

Again, though it’s not required to have worker’s comp for independent contractors, if you don’t, you’re opening up yourself and your production to being sued, fined, or indundated with medical expenses. Contractors can sue if they’ve received an injury, especially if the injury makes it harder for them to earn income or impacts their quality of life.

Employees vs Independent Contractors

When dealing with entertainment insurance, taxes, and legal documentation, it’s critical to be able to correctly classify who’s an employee and who’s an independent contractor.

An employee is someone that receives a wage or salary from the company that they work for. They have an employee contract and must follow the company’s rules, policies, etc.

Independent contractors aren’t considered employees, nor do they get paid a salary. They’re hired for projects or certain tasks and are only paid for the time they are hired to complete a project.

California uses the AB5 law to define the differences between employees and contractors via the ABC test. The criteria include:

A: The worker is free from the control and direction of the hiring entity in performing the work. This a test to see if the worker receives any direction from the employer or if the employer has any control over the worker. This also includes behavioral and financial control as well. Is the worker receiving any instruction from the employer while working? Are they getting paid a salary, or are they at risk of losing money if they miss a workday?
B: The worker performs work that is outside the usual course of the hiring entity’s business. If the company outsources the worker to complete tasks that can be handled internally, it’s most likely a contract job.
C: The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity. If workers with specific skills have their own projects or run a small business, they are more likely to be contractors than employees.

Knowing how many employees and independent contractors you’re hiring will help ensure you have the right worker’s comp insurance coverage for your production.

The Risks of Not Having Workers’ Compensation Insurance for Your Production

When it comes to a film event or photoshoot, there’s a plethora of ways that some can get injured. Aside from the models and talent you’ve cast, there’s your sound crew, lighting crew, set designers, assistants, and more. In a busy environment, it’s easy to fall victim to a faulty wire or falling prop.

If you don’t have worker’s comp insurance, there’s a lot at risk.

Legal Risks

Legal matters can be long-term…which means they can be costly. Some legal risks included:

Getting Sued: Contractors can take legal action against you if they get hurt while working on your project. If your production is particularly dangerous and requires stunts, the use of fire, etc., it’s advised that you get insurance for everyone involved.
Penalties: You can receive regulatory penalties and your production may even get shut down for good. Penalties vary depending on that state–and you’ll have to pay them out of pocket.
Criminal Charges: You could face criminal charges or jail time for not having insurance. This also varies depending on the state you’re working in. For example, in Pennsylvania, intentionally not having insurance coverage is a felony resulting in up to 7 years in prison with a fine of $15,000.

Financial Risks

As a producer, you’ve got a set budget to bring your vision to life. That budget also needs to cover pay for your talent, crew, catering, equipment, or anything else you’ll need for your show or shoot.

Lost Wages: If a worker can’t get work and make a living after getting injured on your set, you’ll have to cover these wages–which can add up quickly.
Lawsuit Expense: Lengthy lawsuits are time-consuming, costly, and interfere with completing your production.
Medical Expenses: Medical fees add up. This goes beyond paying for an ambulance and initial medical fees: you may have to pay out-of-pocket for surgeries, hospital rooms, medication, physical therapy, and more.
Getting Fined: The state can fine you for hiring talent without having worker’s comp insurance. For example, according to the California Labor Code, not having worker’s comp insurance is a criminal offense, with fines starting at 10,000 dollars.

Reputational Risks

Reputation matters in the entertainment industry. If a model or actor gets injured while working with you, and you don’t have insurance to cover them, this could lead to bad press.

Not only could this prevent talent and crew from working with you, but it can also mean colleagues could be hesitant to collaborate. If other producers know you failed to get proper coverage for your workers and talent and put them at risk, they may not be interested in joining your projects.

Make Workers’ Comp Simple for Your Production

workers’ comp insurance is a must, and you need to have it before you start working on your production. But on top of overseeing an entire production, you probably don’t have much time to look and find the best coverage for you and your employees.

Well, LÜK is here to help. Our payroll software covers all aspects of worker compensation, freelancer classification, and tax payments and allows for paying talent from multiple talent agencies with only one invoice.

Our team is passionate about what we do and is more than capable of making your job easier. And we’d love to keep you from getting sued for not being properly covered.

Book your demo with LÜK