Indie Producer's Checklist: 6 Steps to Prep Your Production Company for Filming

Setting up a production LLC or corporation is a crucial first step to take when embarking on a filmmaking journey—but it’s not the only step! Before diving into production, you need to ensure your project is well-organized, legally compliant, and financially sound. 

Below, you’ll learn about six critical tasks you need to tackle before you can commence with production. Specifically, I’ll walk you through:

• Setting up a company bank account
• Purchasing production insurance
• Making critical hires
• Selecting a quality payroll provider
• Getting union agreements and security deposits in order

Let’s start with arguably the most important element of producing a project: Managing money.

1. Open a Production Bank Account

Establishing a dedicated production bank account makes it easy to track and reconcile deposits and expenses.

As you evaluate bank options, there are a couple of important things to consider. First, look for a bank with experience in the entertainment industry. As for account type, a business checking account is usually a good choice, but some banks also offer nonstandard accounts with additional benefits that may be useful to your team.  You should evaluate what works best for your project.

To establish your account, you need to name signatories, which are individuals who can approve payments. Best practice for independent productions is to have at least two authorized signatories approve each payment. It’s also typical to require approval from the producer or director on payments over a certain amount. These details are recorded in a document called a bank mandate, which is created during the account set-up process.

There are some circumstances when you might need to open multiple accounts. For example, if you plan to film internationally, you’ll also need a foreign currency account. You may also choose to set up a local bank account which can be used to handle everyday transactions if you plan to film on location for an extended period of time. Finally, it may make sense to apply for a business credit card or line of credit to cover initial expenses and cash flow gaps. You should consult the best approach for your production with your accountants.

2. Purchase Insurance

Accidents happen—and it’s absolutely crucial to the long-term health and success of your production to make sure you’re protected against the unexpected. In the entertainment space, there are numerous insurance policies you can purchase to provide peace of mind. Some are mandatory to have in place before you start filming; others are optional but strongly encouraged.

Common types of entertainment insurance include:

• General Liability: A good general liability policy to offset financial and legal risk for any potential property damage or bodily injury that occurs on set. Stunts are typically not covered, but additional coverage can be added.
• Workers' Compensation: Covers medical expenses and lost wages if someone gets injured on the job. Workers’ Compensation insurance is required if your production company will employ individuals.
• Equipment: Covers loss or damage to your production equipment.
• Automobile: Covers automobile liability and physical damage.
• Inland Marine: Covers rented equipment, owned equipment, third party property damage, extra expenses, and office contents while they are being transported on land.
• Errors and Omissions (E&O) Insurance: Protects against legal claims related to intellectual property, copyright infringement, and defamation.
• Excess Liability: Covers liability above and beyond the established production limits.

So, which policies are mandatory and which are optional? While not required by law, many rental houses, payroll companies, bond companies, and banks require productions to carry general liability insurance. Some unions, like the Screen Actors Guild (SAG) also require general liability insurance to be in place before a production can work with their talent. 

Similarly, E&O insurance isn’t necessarily required while filming, but is often required before producers can sell or distribute their content. A policy can cover costs associated with legal fees, judgment and settlement fees, and defense costs associated with lawsuits alleging unauthorized use of ideas, plots, characters, or titles. In addition to production companies, distributors, film festivals, and television networks often carry these policies to protect themselves from lawsuits and costs associated with stalled projects.

Equipment insurance isn’t legally required, but some businesses require productions to carry a policy before they’ll work with you. It’s also a smart investment, since nearly all film equipment comes with a hefty price tag.

Where can you purchase entertainment industry insurance policies? 
EP-vetted insurance providers offer various policies designed exclusively for entertainment industry companies. You can combine multiple policy types to minimize risk associated with actors, physical structures, weather, streaming—and everything in between.

• Lockton Insurance Brokers
• AON 
• Gallagher (AJG) 
• HUB International 
• Front Row Insurance Brokers
• Chubb

As you evaluate your options, be sure to read the fine print to make sure the policy you’re taking out offers the coverage you need.

3. Hire a Production Accountant

From budgeting to billing to payroll, production accountants (PA) are the financial powerhouse behind every film, game, and television show. This critical hire is tasked with applying the necessary financial controls to keep your budget, payments, and production on track. Since they’re responsible for many things at every production stage, hiring the right PA is critical to your success—and it’s wise to bring them on as early as possible.

In a broad sense, the PA is responsible for tracking production spend and making sure everyone gets paid. Their process starts with setting up your bank accounts and general ledger, tasks that must be completed before you can invest in budgeting, bookkeeping, or payroll solutions.

Throughout production, the PA and their team will handle tasks like maintaining file systems, delivering cash to sets, managing day-to-day purchase orders and invoice processes, administering per diems, setting up vendor accounts, maintaining financial records, managing incentives, setting up residual payments, and watching for any significant variances between the project budget and money being spent. It’s a big job, and a very important hire to get right.

4. Hire an Entertainment Lawyer

It’s practically inevitable that you’ll face a legal issue at some point in your career. When that day comes, it’s important to protect your legal interests, with the help of an experienced entertainment lawyer.

Lawsuits can be filed on anything from ambiguous employment contract verbiage to intellectual property rights infringement. Having a dedicated legal representative on retainer will help you successfully negotiate contracts, monitor contract term compliance, and take action if others violate contract terms.

It’s smart to invest in an entertainment lawyer early in the production process because they can help you establish thorough and fair creative partnership agreements. Down the road, they’ll also help you navigate any disputes that arise and can provide guidance on how to expertly negotiate rights to use other’s intellectual property while simultaneously protecting your own.

5. Get Union Agreements and Deposits in Order

Union agreements are contracts negotiated between industry unions and producers. Agreements exist to create standard practices and ensure fairness for production workers.

Major unions include:

• DGA (Directors Guild of America): Represents directors, assistant directors, production managers, and others involved in directing.
• SAG-AFTRA (Screen Actors Guild - American Federation of Television and Radio Artists): Represents actors, announcers, journalists, and other media professionals.
• WGA (Writers Guild of America): Represents screenwriters, TV writers, and other content creators.
• IATSE (International Alliance of Theatrical Stage Employees): Represents technicians, artisans, and craftspeople in the entertainment industry.

These unions play a pivotal role in protecting their members by ensuring they receive fair wages, are provided with safe working conditions, and have access to benefits like health insurance and pensions.

Union agreements are re-negotiated periodically, resulting in collective bargaining agreements (CBAs) that outline specific terms and conditions. Key aspects covered include minimum wage scales, working hours and overtime regulations, health and safety guidelines, residual and royalty compensation details, and hiring practices.

When entering into an agreement with a union, which is required before you can work with their talent and crew, producers are often required to pay a security deposit. This is an up-front cost designed to ensure wages and benefits will be paid. Health and pension contributions are also required by several unions and must be considered in production budgets. These security deposits—typically calculated based on the estimated budget and scope of the production—are held in escrow and returned to the producer upon project completion barring compliance with the union agreement.

In some cases, independent producers may be able to minimize costs by utilizing special agreements that exist for such projects. For example, SAG-AFTRA offers a Modified Low Budget Agreement, which offers some concessions to make union talent and crew more accessible to producers working on projects that fall below a specific threshold.

6. Hire a Payroll Provider

Production payroll gets complicated, fast. Managing talent from multiple locations, dealing with different tax jurisdictions and employment laws, coordinating benefits, and ensuring union compliance is a big job. And that’s all while keeping up with ever-changing regulations, taking steps to avoid costly penalties, and, of course, managing payroll and residuals.

Entertainment Partners is the most trusted payroll provider in the global entertainment industry for good reason. Our smart but simple payroll solutions help you boost team productivity, while expert hands-on training ensures your production accounting team and production workers know exactly how to successfully track hours, process payroll, and ensure accurate payments every time—which keeps everyone happy! When you’re ready to explore payroll options, learn more about what we have to offer.

This article contains general information we are providing on a subject that may be of interest to you. Nothing in this article should be considered tax, accounting, or legal advice. You should consult with your own tax, accounting, or legal advisors regarding the applicability of this information to your specific circumstances.