One of India’s top grossing movies was insured under a film insurance. What is that?

Oct 14, 2019 | 1 month ago | Read Time: 4 minutes | By iKnowledge Team
Film Insurance Policy for India's Top Movies

Interestingly, the sheer number of things that can be insured is growing by the day. Aside from regular insurable subjects like vehicles, property, health, and life, there are other lesser-known insurable things like body parts, satellites, and even actors’ lives. Among these rare insurable items are movies. Typically, the bigger the movie, the larger the sum it is insured for. In fact, Baahubali 2: The Conclusion is one of the most expensive Indian movies ever made. And it was insured for a whopping sum of 200 crores!

According to the insurer, the policy insured the movie against unforeseen incidents like the illness of an actor, death of a crew member, accidental damage, or natural calamities that could lead to delays in the schedule of the film. The film’s insurance also offered coverage for any equipment damage due to accidents during the shoot. The terms of the film insurance policy vary from one movie to another. To understand how this kind of insurance plan works, let’s begin with the basics.

What’s a simple way to explain film insurance?

To put it lucidly, in many ways, a film insurance policy is quite like a health insurance policy. To understand this better, let’s take the case of a health insurance plan that offers insurance coverage against any unforeseen health disorders, diseases, or accidents. Much like the medical insurance plan that helps to cover hospitalization costs or offers the individual a lump sum in case they are diagnosed with certain specific diseases, a film insurance plan also protects the production company against unanticipated losses by covering part or all the costs involved in unpredicted accidents, or offering a large sum to handle catastrophes.

Why is film insurance necessary?

Filmmaking is a complicated process that involves several parties working together. Also thrown into this mix are a wide range of external factors like varied locations, heavy equipment, unpredictable delays, and the possibility of many kinds of accidents. For producers who finance big-budget movies, any of these factors could result in sudden, unmitigated losses. Having an insurance cover helps to alleviate some of the risk involved.

What does film insurance cover?

In common practice, no two film insurance policies are the same. Each film insurance plan is tailored to suit the needs of the production company involved. In general, film insurance covers unforeseen but plausible occurrences like the death of crew members which is vital to the production and development of the film, the illness of an actor involved, damage to equipment, and delays or destruction due to natural disasters.

What are the benefits of taking an insurance cover for a movie?

An insurance policy offers three kinds of protection for film production companies – property, legal, and contractual.

Property protection safeguards the production company against loss or damage to assets like production equipment. These equipments are typically rented out from a rental company, and the producer is responsible for them as per the terms in the rental agreement.

Legal protection covers the overall liability that arises from bodily injury to the parties involved in filmmaking, damages to property on shooting locations, or any other unforeseen accident or damage that can affect the parties involved in the legal contracts signed by the production company.

Contractual protection implies that film insurance helps the film production companies fulfil the clause in the contracts that they sign with a film distributor, which requires that they have the film insured. More distributors are including this clause in the contracts they enter with film producers.

What are the kinds of film insurance policies?

Some of the most commonly used film insurance policies are listed below.

  • Public liability policy – Insurance cover for members of the public and their property, should either of them suffer from injury or loss during the film production process.
  • Workmen insurance policy – Protection against costs or losses due to bodily injury, disability, or death of workmen employed on the film set.
  • Accident insurance coverage – A comprehensive insurance coverage that offers protection from expenses because accidents to any member of the team.
  • Equipment coverage policy – Coverage for loss of or damage to rented or own equipment used during the development and production of a movie.
  • Errors and omissions insurance – Protection in case any lawsuits claiming illegal use of the copyrighted material arise against the production company.

Film insurance in India

Before Baahubali created headlines for its substantial insurance cover, most (if not all) movie producers were typically wary or simply not interested in obtaining an insurance cover for their movies. In recent times, however, the tides are rapidly turning, and an increasing number of producers and production companies are getting on board with the idea of having their movies insured adequately right from the beginning of the filmmaking schedule. If the present trend continues, then the day may not be far when nearly all producers will seek to ensure their projects, thus opening newer avenues for the insurance market in India. To know about Aegon Life’s life insurance products like term insurance and other products, visit our home page.

Fact citation:

https://economictimes.indiatimes.com/definition/film-insurance

http://www.legalservicesindia.com/articles/film.htm

http://www.frontrowinsurance.com/articles/articles/bid/24987/film-production-insurance-why-it-is-needed


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