Apart from the above mentioned
movies some other movies were also insured such as
Saathiya, Joggers Park, Asambhav, Chalte Chalte, Main Hoon Na, Taj Mahal,
Khel, Ganga Jal, Kal Ho Na Ho, Lakshya etc. Till now United
Insurance India Ltd. (which is only insurance company to provide for
film insurance in India) has insured more than 40 films and hoping to
double this figure with in one year. Producer Yash Chopra claimed a
compensation of Rs. 3.5 million from United India Insurance when
Aishwarya Rai had an accident, her shooting schedules were disturbed and
a set that was put up had to be brought down.
Another reason for the move towards
insurance is that Film production was given `industry' status in 2000,
and RBI allowed banks to lend to film production. Now the insurance of
the film is a pre requisite for bank loans for Hindi films. Therefore
any one who wants loan from bank for film making has to take insurance
on his film.
In the future with more
uncertainties in the film market such as Bharat Shah's arrest and fancy
for cocaine by some of our stars, more and more producers will move
towards insuring their films.
insurance coverage includes
Leading insurance companies have agreed to compensate for delays and
losses due to cyclones, bandhs, strikes, adverse weather conditions and
traffic interruptions as well as harm to individuals involved in
film-making. Depending on the type of policy one takes, insurance in
Hindi films can be grouped under the following broad heads.
1. Named Artistes such as the Main Cast, Important Support Cast,
Directors, Technicians etc.
2. Properties, Sets, Production Equipments, Negatives etc.
3. Public Liability
4. Money Insurance
5. Workmen Insurance
6. Accident Insurance
For a typical movie various covers as mentioned above typically exist.
Depending on the type of movie one is making, one will need to take one
or all of the above coverages as a part of the policy. For example in a
movie like Devdas where large sets have to be put in Film City, the
policy will be heavy on insurance for properties and sets whereas for a
movie like Kaun which is shot in just one room this kind of insurance
can be completely avoided. Also in a movie like Khiladi 420 where a
great number of stunts have to be performed by the actor, extra
insurance may be taken whereas in a movie like Aastitva this may not be
types, insurers liability and exclusions
1. Named Artistes such as the Main Cast, Important
Support Cast, Directors, Technicians etc.
Coverage in such cases can be claimed due to non-appearance which may
arise due to - death, accident/illness involving hospitalization, death
in immediate family, natural calamity, complete breakdown of transport
system, riot/strike/civil commotion/curfew like situation prohibiting
the cast from reaching the site of shoot, acts of kidnap, murder etc
Insurer's liability is restricted to reimbursement of lost remuneration
in event of above events, reshooting expenses and losses due to expenses
on account of cancellation/postponement etc.
However no cover can be claimed if
the cancellation has taken place if the person is a accused criminal
under arrest, detention, interrogation etc. or accidents arising out of
participation in hazardous stunts or conditions like pregnancy etc.
Sets, Production Equipments, Negatives etc.
Coverage in such cases is due to losses arising out of fire, flood,
storm or any other acts of God or natural calamities or accidents due to
main cast /accidental/external means or acts of riot/strike/ civil
commotion etc. or terrorism/theft/burglary/dacoity or risks of transit
Insurer's liability is limited to material damage, additional expenses
on account of bringing back things to normal, irrevocably lost insured
expenses on account of cancellation/postponement etc. For example Yash
Chopra was able to claim Rs 3.5 million insurance due to a set, which
had to be brought down when Aishwarya Rai could not attend a shooting
schedule because she had injured herself.
Major Exclusions are due to objects
of art unless valued and declared or wear & tear/inherent defects
electrical and mechanical breakdown of equipments or inventory losses or
deterioration of negatives because of humidity and other atmospheric
Coverage is due to injury/loss to members of public and their property
which can include indemnity for court or fees, advocate's fees, legal
costs and expenses incurred with Insurer's consent in the successful
defense of suits/writs/summons brought against to prevent the film being
shot further or being released. For example Kaun Banega Crorepati had
taken this type of Insurance against PIL (Public Interest Litigation)
Major exclusions exist in this case are fines, penalties, punitive
damages or liability assumed by virtue of an agreement which are
Coverage in this case is cash in transit between shoot locations or cash
kept at the shoot site (under lock and key) or cash embezzled by the
authorized person of the insured but detected within 48 hours of the
occurrence. Insurers Liability is Rs.200,000 per incident of loss with
an overall limit of Rs 600,000 during the period of the policy. Major
Exclusions include personal cash of any nature or unattended cash or
loss arising out of use of duplicate key whilst the cash is kept in the
premises outside business hours.
Coverage includes bodily injury resulting in death/disability to the
workman arising out of and during the course of employment on-shoot
locations. Insurer's liability is as per the provisions of the Workmen
This coverage is for all members of the production team on-location
and/or off-location at a predetermined rate. Coverage can be claimed for
bodily injury resulting from accidents caused directly and solely by
external, violent, visible means during the policy period.
film industry still insurance shy?
Since opening its film insurance account with the movie Taal in 1998,
United India's list of insured films has grown to 42 by the end of June
2003. The merits of being insured and instances of disbursements against
claims have helped the industry's interest in getting films insured. But
amenable candidates are still only a handful; many big banner
productions such as Ram Gopal Varma's Company preferred to go uninsured.
Further, United India's business is even today confined to Bollywood;
attempts to get South Indian films insured are yet to yield dividend.
According to insurance company
officials, there is continued perception in the film industry that
premium outflow merely adds to the budget of a movie and is hence an
avoidable expense. This, despite a well-known major production of the
recent past, having scored three instances for claims - ranging from
personal injury to major fire - and refusing to insure through all that.
The cost of disinterest in insurance becomes clearer from the fact that
United India's premium is pegged at approximately 1-1.5 per cent of a
film's budget, considerably lower than the 4-6 per cent range of film
completion bond guarantees abroad.
The domestic insurer covers the entire gamut of film making up to
post-production, commencing with cast insurance; props, set and
wardrobe; film negative insurance, extra expenses covering postponement,
fire, burglary; money insurance, personal accident and legal liability.
So far, the variety of claims that
have come up before United India includes delay on account of injury to
a film star, unexposed negative due to a malfunctioning camera and
damage to film equipment in a road accident. To earn the benefit of
insurance cover, a film producer is required to submit details of his
track record, budget, script and production schedule. Drafting an
insurance product for the film industry is apparently a time-consuming
task and therefore premium is decided on project-to-project basis,
varying with the kind of risk the insurance company is taking upon
Advertisement films - step in right direction
With the advent of new technologies and increasing consumerism new
concepts and ideas are coming in the area of advertisement films also.
That intern demands for more expanses and even stunt seen like films are
now being pasteurized in advertisement films. For example the seen of
bunji jumping in one of the ad films of cold drink. This kind of
advancement makes ad films more expansive and risky, which demands for
Therefore not only feature films but
advertisement films are also showing keen interest in insurance and
first ever insurance of an advertisement film is an evident example of
this. An advertisement film, featuring actress Hema Malini promoting
Rahat Rooh Oil, has become the first domestic advertising film to get
insured. The premium was fixed at 1.10 per cent of the film's budget.
Film is being produced by Lehar Communications and insured by United
India Insurance Company Ltd. the film's budget is Rs 15 lakh. So the
ambit of insurance is expending to even the areas like advertisement
films also. Theses are the indication that now Indian Entertainment
Industry is ready to recognise the concept of film insurance and willing
to insure against any expected or unexpected event.
performance of a film at box office also be covered?
Due to a very huge list of flop films every year and the increasing rate
of unsuccess of many big banners film now a days a demand is also being
made to include the performance of the film at box office. This issue is
not as simple as it prima facie seems. Now we will analyze positive and
negative effects of covering the performance of a film at box office.
The positive effect of this step
will be that producer will make the films free from all the worries
about films fate at box office. Producers and directors will take many
courageous steps and come up with new experiments. Then, even new comers
will also dare to enter in to this profession. The repetition of the
same formula again and again due to fear of unsuccess will also be
reduced. The quality of the films will improve and new ideas and stories
will come forward. Art films, which are in very poor state, will
rejuvenate once again, because then people will not hesitate in
investing on those films.
Although this step might have above
positive effects but there are lots of practical problems and negative
effects in its implementation. The first problem is regarding the
criterion in which the performance of a film would be judged and
indemnified accordingly. It is very difficult to find out a
straightjacket formula according to which the performance of a film
would be judged and that intern makes almost impossible to calculate the
amount of compensation based on that. Secondly due to advent of overseas
rights and musical rights etc., films including those films which are
shown flop, recovers there cost even before there release and in that
case to recover from the insurance company for the performance of there
film will not be right. Lastly there is a huge possibility that this
kind of coverage will the producers and directors idle. They will make
substandard movies without caring for the quality to recover from the
insurance company. They will try to exploit this situation to their
benefit and there will be a huge amount of fake cases. This will lead to
a floodgate situation and it would become impossible for an insurance
company to work.
Therefore in spite of some of the
positive effects due to inclusion of the performance of a film, negative
effects and practical problems are such that it is not advisable to
cover the performance of a film at box office.
Increasing professionalism and demand for more realism has driven film
business towards huge expenses and more risk. Now the changed
circumstances has made it necessary to cover the film under insurance.
In my opinion irrespective of the fact that bank finances or not, as a
film producer it is always better to cover risks by obtaining insurance
cover, which works out to hardly 1-3% of the budget, as it is chicken
feed for even small-budget films since it is added to the cost of the
film. Thus, producers can do themselves a great service by insuring
However, insurance companies need to
beware of the Film Producers who can be a cunning lot if experience
abroad is anything to go by, where many insurers have shut shop due to
huge losses incurred. In normal insurance, the interests of policyholder
and insurer are usually somewhat aligned. If a traveler has taken
medical insurance he does not want to get sick. A film producer doesn't
mind because it is not he who is getting sick but it is some one else
who is directly affected and due to which he is being indemnified.
Regarding the demand to include the
performance of film at box office, as already discussed the practical
problems and negative effects are such that it must not be implemented.
With specific reference to Indian Film Industry, it has still to warm up
for insurance. Although many production houses has came up but the
number is relatively very small. A large section still believes that
insurance does nothing but to increases the budget of the film. This
tendency should be changed. Advent of insurance in advertisement film is
a right step in the direction. Recently some interest has also being
shown by the southern film industry, which was most inactive and
unwilling initially. This indicates that concept of film insurance is
slowly and gradually recognized and accepted in India. It is a good sign
for the film industry and it might just bail out the Indian Film
Industry from its current recession.