Completion Guarantee Bond
Insurance policy that guarantees film completion and delivery even if production exceeds budget or encounters problems.
Definition
A specialized insurance product that assures financiers and distributors that a film will be completed and delivered according to specifications, regardless of production problems, budget overruns, or other complications that might prevent completion.
Completion guarantors assess production plans, budgets, and key personnel before issuing bonds, and maintain oversight during production to identify and address potential problems before they threaten completion or delivery requirements.
Why It Matters
Completion bonds are essential for securing production financing, as most investors and distributors require completion guarantees before committing funds to film projects, given the high risk of production complications.
Bonds protect against total loss of investment due to production failure while ensuring distributors receive deliverable products for their acquisition investments, making film financing feasible for projects involving significant financial risk.
Examples in Practice
Independent film productions typically require completion bonds to secure bank financing, with guarantors assuming responsibility for completion if productions encounter budget overruns or other completion-threatening problems.
International co-productions use completion bonds to assure multiple financing partners across different territories that their investments will result in deliverable products regardless of production complications.
High-budget studio films may utilize completion bonds for particularly complex or risky productions involving challenging locations, weather dependence, or other factors that could threaten successful completion within budget parameters.