The Association of Independent Commercial Producers, (AICP) and PLASA‘s Production Equipment Rental Group have negotiated a standard set of “terms and conditions” for the rental of motion picture camera, sound and lighting equipment.
Historically a production company was presented with a rental agreement to sign that had been drafted by the rental equipment company and was 100% protective of the rental company. The new document is protective of both the interests of the production company and the rental company, creating a sense of fairness and predictability as to how claims involving the use of the rented equipment will be settled.
“It is a wonderful thing when people who do business together can sit down with each other and have an honest conversation that addresses the concerns and the needs of each other’s business,” said Scott Taylor, president of Taylor and Taylor Associates and member of the PLASA Production Equipment Rental Group council. “This open dialogue has been happening the past three months between producers and motion picture camera and lighting equipment rental companies.”
“AICP and PLASA member companies have been discussing how each side can make doing business together easier,” said Matt Miller, president and CEO of AICP. “The end result is these new terms and conditions.”
The committee worked tirelessly for three months to draft the sample terms and conditions document and was comprised of representatives from four AICP member companies, a business manager from the AICP, management from two camera rental companies and two lighting and grip rental companies, a senior claims representative from an entertainment underwriter, an entertainment insurance broker and a PLASA business representative.
The end result is the creation of terms and conditions that reflect how business is done today, that addresses issues concerning the use of digital technology, and opens lines of communication between producers and the rental industry that will allow for other industry issues to be addressed in a timely fashion.
Some highlights of the AICP/PLASA Terms and Conditions:
- Timeliness of the rental company to check-in equipment. The rental company must check-in the equipment within 3 business days of the return of the equipment. This helps prevent questions about whether the equipment was damaged while out on rental or whether it was damaged or stolen after it was returned.
- Notification of Loss and Damage in writing. The rental house must notify the production company accounting department, or other designated person, in writing within three business days of the return of the equipment. The requirement that the accounting department be notified of missing and damaged equipment while the crew is still wrapping the job helps the rental company resolve the claim. This also prevents the crew from hiding the issue from the production company for an extended period of time, which may result in the rental house feeling obliged to absorb the loss.
- Proper insurance wording to protect both parties – who is responsible for what. For example, if the rental house is delivering the equipment to the production company, the rental house is responsible for the equipment until delivery has been made. (Responsibility moves with control of equipment). The proper insurance wording helps avoid issues that sometimes occur when the contractual wording does not contain key phrases that trigger the underlying insurance provisions. This benefits both the production company and the equipment rental company.
- In the event of a claim, the manufacturer determines whether the equipment should be replaced or repaired. This identifies the manufacturers as a reliable third party with knowledge of the gear to be consulted when there is a dispute on a claim.
- Loss of use. Loss of use is based on the greater of actual verifiable loss of use or the historical rental history of the item(s). For example, rental charges are based on the greater of either the actual verifiable loss of business (business turned down due to equipment’s unavailability), or on the average rental history of the equipment. In either case this is not to exceed 90 days. This provision helps create a reasonable expectation of what the production company’s insurance carrier might pay in the event of a loss of equipment versus the rental company claiming a lottery windfall if their equipment is stolen or damaged. It also recognizes that with the demand for newer technology that there is a long waiting time for replacement gear. It seems only fair that the production company be responsible for the time that most equipment can be replaced and that there is a cutoff point in time. For those items that cannot be replaced for a longer period of time, the rental company may want to make a separate arrangement and/or let the production company know that special precautions need to be taken with those items.
- Clearing Data. The production company is responsible for clearing images prior to the return of the equipment and authorizes the rental company to clear any remaining images immediately upon return. This avoids the expectation that a production company might be able to rely on a rental company to store their data for an undisclosed period of time.
- The production companies agreed to raise their limit of liability to $3,000,000 from the current $1,000,000 industry norm. Since most liability claims arise from the use of the equipment by production company personnel (versus defective equipment), this is beneficial to the rental companies who most likely will be joined in the lawsuit.