Film Accounting Glossary
Force majeure claim
What is a force majeure claim?
Also called force majeure.
A force majeure claim covers costs caused by an event outside anyone's control that suspends or delays production: extreme weather, a natural disaster, a public health order, or the death of a principal.
Whether those costs are recoverable depends on the insurance policy, the union agreements, and the force majeure clauses in individual deals. Accounting has to segregate the affected costs from the moment the event starts, because a claim assembled retroactively rarely survives review.
Example
A hurricane shuts a location for six days. From day one the accountant opens dedicated accounts for idle crew, held vehicles, extended hotel, and the restart, because a claim assembled from a mixed ledger three months later rarely survives review.
Figures are illustrative, chosen to show the mechanics rather than to quote market rates.
Where you'll see it
Segregated accounts opened the moment the event starts, then tested against the insurance policy, the union agreements, and individual force majeure clauses.
Common mistake
Waiting until the event is over to start segregating costs. A claim assembled retroactively from a mixed ledger rarely survives the insurer's review.
Related questions
- What costs does a force majeure claim cover?
- It depends on the policy and the contracts, but typically idle crew, held equipment and vehicles, extended accommodation, and the cost of restarting.
- How should accounting handle a force majeure event?
- Open dedicated accounts from day one of the event so affected costs are separated as they are incurred rather than reconstructed later.