Insurance is a process whereby a certain sum is paid at regular intervals to protect oneself or one's property in the event of an unlikely event. When you insure yourself or your property against any unlikely or unforeseen event, you aim at ascertaining the loss that the event might cause, and insurance provides you protection against it. Insurance is a written agreement under which the terms and conditions bind the parties under the contract.
Filmmaking involves a variety of parties, both internal and external. Film making involves a large number of individuals and processes, which creates many unknowns. In reality, big-budget films in India carry risk in terms of the acceptability of their content and might lead to delay in their scheduled release dates. Insurance allows the producer to reduce the risks associated with the production of the film. The general principle upon which insurance business works is that these policies exclude 'communicable' disease or 'predictable' illness from the ambit of coverage, but in the times of COVID-19 and its continuous spread, the companies have undertaken certain factors to bring COVID-19 into the realm of medical claims and to provide protection against hospitalisation due to COVID-19.
Why you need Production Insurance?
With the increasing costs and uncertainties in showbiz, Production Insurances have gained prominence. Huge sets, high-risk stunts, highly sensitive technology, a large amount of money given to performers, and a slew of other elements have made Indian filmmaking a high-risk endeavour. These circumstances necessitate some form of process that assures a producer that he will be adequately compensated in the event of any uncertainty. Earlier insurance was viewed as an additional cost to the film's budget, and producers were unwilling to get insurance covers. However, the arrest of Sanjay Dutt during the filming of 'Khalnayak' spurred Subhash Ghai to insure his next picture, 'Taal,' for which he paid a premium of Rs 1.5 million for a film worth Rs 110 million. Insurance covers loss caused due to delays and losses due to cyclones, bandhs, strikes, bad weather, and traffic disruptions, as well as injuries to film crew members. The Film Production Package Insurance kicks in throughout the pre-production and production stages of a film. Any damage to the sets and their equipment is covered by the coverage. The coverage also covers any damages incurred if the film or shoot is hampered by additional risks such as inclement weather or natural disasters such as earthquakes and tsunamis.
Types Of Policies
- Distributor's Loss of Revenue Insurance Policy -Once a film is finished, the distribution and satellite rights, as well as satellite TV and internet streaming rights, are sold to Film Distributors (India & Overseas). Distributors may protect their predicted revenues with this coverage. The policy tackles several risks, including the impact on post-release income owing to a variety of events such as political/social opposition, demands for boycotts/strikes, violent protests and riots, and natural disasters such as floods or earthquakes. However, under the policy provisions, income loss due to state government prohibitions is often excluded. Bans imposed by other parties or organizations, on the other hand, are covered by insurance. DLOP is a type of co-insurance where the insurers split the risks between two parties if the cover and risks are considerable, notably for famous actors. The risks might be split 70:30 or any other ratio decided by the two insurance companies. A film's budget, actor expenses, timetable, and shooting locations must all be shared by an application. Producers are compensated for production losses caused by the non-appearance of actors (due to scheduling conflicts, personal issues), theft, injuries, rioting, or natural disasters. Post-release problems, such as theatre closures, are also addressed.
- Errors and Omissions Insurance ("E & O Insurance") - Defamation, invasion of privacy, violation of the right of publicity, idea and storey theft, copyright infringement, plagiarism, piracy, and the illegal use of names and trademarks are all covered by these regulations. Unfair competition and failing to offer screen credit are also covered under this type of insurance. Sometimes, even the most careful filmmakers may face a lawsuit through no fault of their own. Even if they did not willfully infringe another's rights and were meticulous in acquiring all the rights they felt were required, they may be held liable. It will cover both possible liabilities and defence expenses. E & O Insurance does not cover willful misconduct or claims that have already been filed. For negligent (careless) activities, the insurance carrier will bear accountability, but not for intentional misconduct. Depending on the genre of film being examined for coverage, insurers have varied concerns. Movies might be true or false, original or derivative, or any mixture of the two. When a script is original, that is, it is not based on a previously published work; its sources must be traced to confirm that it is unique and that no material from another copyrighted work has been duplicated.
- Money Insurance - Cash in transit between shot sites, cash retained at the shooting site (under lock and key), or cash embezzled by the insured's authorized person but found within 48 hours of the event are all covered in this scenario. Personal cash of any kind, unattended cash, and loss resulting from the use of a duplicate key while the cash is held on the premises outside of business hours are all major exclusions.
- Workmen Insurance- Worker bodily harm resulting in death or disability coming from and during employment on-shoot sites is covered. Workmen Compensation Act requirements govern the Insurer's obligation.
- Public Liability- Indemnity for court or fees, advocate's fees, legal costs and expenditures paid with Insurer's approval in the successful defence of suits/writs/summons made against to prevent the film from being filmed further or being distributed are covered.
COVID-19 Insurance - A New Perspective
COVID-19 led to world wide lockdwon, entertainment industry lockdown, and producers are now seeking virus-related insurance coverage to protect their assets in the event of COVID-19 or similar pandemic disruptions. New policy coverage is either significantly more expensive or does not include pandemic business interruption coverage, prompting many in the sector to believe that government involvement will be necessary if the entertainment sector ever returns to its pre-COVID-19 financial position. In the UK, following its involvement in the trade credit insurance market in May, UK Culture Secretary Oliver Dowden has recently announced the establishment of a €500 million government-backed initiative for domestic film and television enterprises that are having trouble obtaining COVID-19-related insurance. The Film and TV Production Restart Scheme would assist in getting TV and film projects that have run into insurance issues back up and running by assuring that they would be supported if further losses are incurred due to COVID-19. The goal is to fill the vacuum caused by the lack of COVID-19-related loss insurance for a cast member and health issues caused to the crew due to COVID 19.
However, this is considered a commendable move to protect the production houses with uncertainty caused due to coronavirus. In India, there is no provision of COVID-19 insurance in showbiz as yet. Still, with India facing state-imposed lockdowns and curfew restrictions, this move could prove beneficial to protect against losses and uncertainties arising out of it.
Current Status of COVID-19 insurance in India
In India, there is an official announcement of COVID-19 insurance cover. However, Cine and TV Artistes' Association (CINTAA) and Federation of Western India Cine Employees (FWICE) and Indian Film and TV Producers' Council (IFTPC) have taken specific steps to ensure the implementation of COVID-19 insurance across the entertainment industry in India. As per the order, every film and TV production house must undertake general COVID-19 insurance for all cast and crew. Due to COVID-19, death insurance of INR 25 lakh and hospitalization insurance of INR 2 lakh would be granted evenly across the cast and crew hierarchy. This is based on the recommendations of the associations as mentioned earlier to minimize the transmission as well as minimize the economic impact of COVID-19 in the entertainment industry, and if any person while the shooting or filming gets contacts with COVID-19, they can be benefitted from such COVID-19 insurance covers undertaken by the production houses.
In terms of coverage, the general insurance policies exclude any infectious disease from the ambit of insurance. However, when it comes to claims against COVID-19 for hospitalization or death by COVID-19, the insurance companies are now accepting claims from these incidents on case-to-case basis, and it is not general industry practice.
When the COVID-19 first hit India followed by a countrywide lockdown and ,all the shootings were halted. It was observed that certain events, such as 'curfew', 'epidemic' etc., were not defined or covered by any insurance. But to accommodate, certain insurance companies have started protecting the Insurer against COVID-19. They are providing specific and restricted covers in their new insurance plans, and to protect against the monetary losses being incurred due to the halting of shooting in India, various production houses are considering getting a special COVID-19 medi claim. These medi claims are different from general insurance policies in terms of coverage. However, these medi claims are gaining prominence to insure the cast and crew against COVID-19. Previously, insuring a film meant protecting against unanticipated events such as an actor's illness or natural disasters that caused delays in the production schedule. However, production houses are now open to undertaking COVID-19 protection measures to ensure maximum safety and coverage.
The concept of Film Insurance in India began with the film Taal and has been a successful business proposition since it 'isn't the most popular. An unanticipated event that results in set damage or a postponement of the shooting schedule qualifies the producer to file a insurance claim. Hence, there is no such thing as good or bad insurance, but as long as you have adequate coverage for all parts of your production with the most efficient and savvy mechanism, it can be considered the best insurance for you!