Contingency & Fringes
No budget survives contact with a real shoot untouched. The pros don't pretend otherwise — they set aside a pool of money for the things they can't predict. That pool is contingency, and forgetting it is the difference between a bump and a shutdown.
Here's a truth every experienced producer knows and every first-timer learns the hard way: no budget survives contact with a real shoot. Something will go wrong — weather, a broken lens, an actor's sick day, a location that falls through. You can't predict which thing, but you can predict that something will. The professional answer isn't to guess it away; it's to reserve money for it. That reserve is contingency, and it's the single line that most separates a real budget from a hopeful one.
What contingency is
Contingency is a dedicated pool of money — a real line item near the bottom of the budget — set aside to cover the unforeseeable. It is not earmarked for anything specific; that's the whole point. It's the buffer between "a normal bad day" and "we ran out of money and shut down." When something goes wrong (and it will), you draw from contingency instead of blowing the whole budget.
The 10% rule
The common industry guideline is roughly 10% of your total budget as contingency — sometimes a bit less on very controlled shoots, often more on ambitious, weather-dependent, or stunt-heavy ones. It's added as a percentage line calculated on the whole budget below it.
Ten percent is a floor to think from, not a magic number. The riskier and less controllable your production, the higher it should go. What matters is that it's there, sized deliberately, and visible on the topsheet.
Contingency vs. padding
Don't confuse contingency with the line-item padding from Chapter 5. They're different tools:
- Padding lives inside individual estimates — rounding a specific uncertain line up because you're not sure of the exact number.
- Contingency sits on top of the whole budget — a single reserve for genuinely unforeseeable events, not tied to any one line.
- Don't double-count. If every line is heavily padded and you add a big contingency, your budget becomes uncompetitive. Estimate honestly, then add contingency once, cleanly, at the bottom.
Insurance and completion protection
Contingency handles the small-to-medium surprises. Two other tools handle the big ones. Production insurance covers real disasters — injury, equipment loss, damage, liability — and is a required, budgetable line (not optional, and easy to forget). On larger films a completion bond/guarantee is a third-party guarantee to financiers that the film will be finished, which comes with its own fee. For most indie budgets, the essentials are: honest estimates, a real contingency line, and proper insurance.
I used to see contingency as admitting I wasn't good enough to get the budget right. Exactly backwards. The best producers I know always carry it, precisely because they've been on enough sets to know the universe gets a vote. The rain comes. The lead gets food poisoning. The perfect location cancels two days out. With a contingency line, those are stressful problems I solve. Without one, they're the day the money ran out and everyone went home. Ten percent has saved more of my shoots than any brilliant plan — because the plan is what changes, and the contingency is what lets you keep going when it does.
Your budget is now complete and honest — estimated, fringed, padded where needed, and protected by contingency. That closes Module 2. In Module 3 we turn to the budget's twin: the schedule. Because how you spend those days determines whether the budget you just built actually holds.
Map your shoot days, prep, and post onto a real calendar. Because time is money on a film, the Calendar tool lets you plan your schedule and instantly see how each day shapes the budget.