Do Insurance Facility Available for Film Industry in India ?
Since 1931, when the first film was released in India, India have produced more than 67,000 films in over 30 different languages. In 2013, the Indian film industry produced more than 1000 movies making it the biggest film producer in the world.
Table of Contents
- Position of Indian Film Industry
- Need of Insurance in Film Industry
- What triggered the drive towards film insurance in India?
- Film Insurance Market in India
- What’s covered in Film Insurance Policies?
- Named Artists such as main cast, directors, technicians etc.
- Properties, sets and Production Equipment’s
- Public Liability
- Money Insurance
- Workmen Insurance
- What’s next for the Insurance Companies
- Conclusion
Position of Indian Film Industry
The position today is that Indian film industry is the largest in the world in terms of box office share and tickets sale etc.
With the tremendous growth in the film industry and rapid improvement in the sets and equipment used in film making, the cost had gone up from several millions to billions of rupees. Huge sets, highly risky stunt seen, very sensitive equipment, a huge amount of salary paid to the actors and a lot other factors, has made Indian Films a very risky business
Need of Insurance in Film Industry
Thus, with the ever increasing costs in producing a film, the producer needs some kind of insurance that in case everything goes south, he will be indemnified. To cope up with the situation in Hollywood, the second biggest industry after Bollywood, came with insurance for the films, While initially the big players sees tremendous growth, with huge premiums, however, once they were hit badly, they had to close the shop.
What triggered the drive towards film insurance in India?
Initially, producers felt film insurance as burden and extra cost yielding no value. Hence, they were hesitant to get their film insured. However, the arrest of Sanjya Dutt changed that perspective. With his arrest for 1993 bomb blasts, the shooting for the movie ‘Khalnayak’ got endlessly delayed, due to which its producer Subhash Ghai decided to get his next film ‘Taal’ insured. That was the turning point for the film insurance sector, as more and more producers started coming forward to get their film insured.
After taal was insured, producers for movies like Mohabatein, Lagaan, Kabhi Khushi Kabhi Gham, Ashoka, Dil Chahta Hai, Kuch na Kaho rushed for getting their movies insured.
Another major reason, which triggered insurance for films, was its status as industry, which was given to it in 2000.
After allotment of status, Reserve Bank of India allowed banks to lend the film production units. However, their prerequisite was film insurance. Thus, major production houses, who were in need of the loan from banks had to rush to get their films insured.
Film Insurance Market in India
Initially when the film insurance was introduced, insurance companies were asking 6% of the production cost as premium. However, for Indian producers, that much premium was way too high. With the passing of time and no major production house opting for insurance due to high premium costs, premiums were dropped to as low as 1% of the production costs.
Currently, New India Insurance and National Insurance Company are some of the public insurance companies providing for film insurance. With them, private players like IFFCO-Tokyo and Future Generali India Insurance are also in race to provide film insurance.
What’s covered in Film Insurance Policies?
Currently there are various types of policies being provided to producers, with each policy covering different aspects depending on the premium. However, they can be categorically divided into following main heads:
- Named Artists such as main cast, directors, technicians etc.– The coverage broadly includes reimbursement in case of non-appearance, which may arise either due to death, sickness involving hospitalization or death in immediate family. Natural calamity, riot, strike or civil war are some of the other aspects where insurance can be claimed. However, under this type of policy, insurer’s liability is restricted to remuneration of reshooting expenses and losses on account of cancellation/postponement etc.
- Properties, sets and Production Equipment’s –Coverage mainly includes loss arising out of fire, flood, storm or other Acts of God or natural calamities. However, insurance cover can be extended to include terrorism, theft, burglary or other risks of transit. Under this type of policy, insurer’s liability is restricted to material damage and other costs involved in bringing back things to normal.
- Public Liability – Under this scheme, insurance can be claimed in case of damage to public property, due to which court cases may arise. Such type of policy indemnify from court fees, advocate fees, legal expenses incurred, however with prior permission of the insurer. It went on to include legal battles against the releasing of the film as well.
- Money Insurance –This type of policy includes coverage for money kept in transit at shooting locations under lock and key, but does not include personal cash of any nature.
- Workmen Insurance –This covers any bodily injury, which might be caused to stuntman, during the course of employment on shooting.
What’s next for the Insurance Companies
While advertisements indulging movie actors are on the rise, the insurance for such advertisements have taken a boom for the insurance companies in the past decade or so. While the invention of new technologies have triggered new concepts and ideas for advertisements, these advertisements demands more and more cash flow. With more action in advertisements, it makes ads more risks and expensive.
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. The first case of advertisement insurance was seen in Hema Malini’s Rahat Rooh Oil ad.
CONCLUSION
With the ever expanding scope of the film industry and new comers coming to the industry with the dream of making big, producers have gotten a long way for choosing established actors and shooting locations. However, such diversity also brings more risks and expenditure. Insurance have proved to be the most useful tool for the producers to eliminate such threat, thereby giving incentive to the producers to make more and more films.
However, what happen in case the film does not perform well at the box office. Do film industry need insurance for that as well? Well, that’s the question which has to be debated in order to secure the interest of producers and everyone involved in the making of the film.