What the guarantor reviews before bonding
Before it signs, a guarantor reads the shooting script, the shooting schedule, the full production budget, the cash flow schedule, key deals, the insurance package, and the résumés of the director, producer, line producer, and production accountant. It looks for things like 14 pages scheduled on a day with a car stunt, or a camera line that assumes a package rate no rental house would quote. Problems get fixed before the bond is issued, and the budget that comes out of that review becomes the locked budget.
Where it sits on the top sheet
| Line | Amount |
|---|---|
| Total above and below the line | $2,400,000 |
| Contingency, 10% | $240,000 |
| Completion bond fee | per guarantor's quote |
| Grand total | $2,640,000 + bond fee |
Guarantors generally require the contingency to be in the budget, and the bond agreement often treats that contingency as the first money used when costs rise. Only after contingency is gone does the guarantor's own money come into play.
How it works when things go wrong
During production the guarantor receives the same weekly cost report and daily production reports the producers see. A show that falls a day behind in week one gets a phone call. A show whose estimate to complete keeps growing gets a guarantor representative on set, then meetings about cutting scenes, and in the worst case a takeover in which the guarantor controls the remaining spend. If the film can't be finished at all, the guarantor repays the financiers.
What a bond doesn't do
A completion bond doesn't insure against a cast member's illness or a fire on stage; that's production insurance, which the guarantor will require separately. It also doesn't guarantee the film is any good or that it sells. And it protects the financiers, not the producer: overages the guarantor covers can be recouped ahead of the producer's own backend under the financing documents.
The completion guarantor entry covers the companies and parties involved, and completion bonds explained walks through a bond agreement section by section.