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Film industry is insurance shy

Latha Venkatraman
Shyam G. Menon

MUMBAI, April 12

FILM insurance is for the moment a profitable business. Notwithstanding the newness of Bollywood to organised film making, United India Insurance Co Ltd — the only agency currently providing film insurance — estimates that claims so far constitute only 40 per cent of the overall premia collected. The balance puts film insurance in the category of a profitable business, the insurer, however, being very clear that its association with the sector depends on continued profitability.

Since opening its film insurance account with the movie Taal in 1998, United India's list of insured films has grown to 22 by end-March 2002. They include Mohabattein, Lagaan, Kabhi Kushi Kabhi Ghum, Dil Chahta Hai, Yaadein, Snip, Asoka, Mujse Dosti Karoge, Aankhen, Risthey, Kuch Na Kaho, Badhai Ho Badhai and Hero. The merits of being insured and instances of disbursements against claims has 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.

For United India, drafting an insurance product for the film industry is apparently a time-consuming task. Mr Ajit Gupta, Development Officer, United India, says the premium has to be decided on project-to-project basis, varying with the kind of risk the insurance company is taking upon itself.

Ad firm in first

A FILM featuring actress Hema Malini promoting Rahat Rooh Oil, has become the first domestic advertising film to get insured.

The deal, with premium fixed at 1.10 per cent of the film's budget, was finalised on Friday between United India and Lehar Communications, according to Mr Ajit Gupta, Development Officer, United India Insurance.

According to him, this is the first advertising film to get insured. The film's budget is Rs 15 lakh and the shooting schedule is two days.

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