What is film insurance? Here’s what you need to know if you’re producing a movie

More than 1,700 movies were released in India in 2023, which was an 11% increase from 2022.  While the world of filmmaking is growing more complex and expensive, film insurance has become a critical safety net for producers and studios alike. In the high-stakes environment of movie production, unexpected issues like natural disasters, actor illnesses, or damaged equipment can threaten not only timelines but also finances. Film insurance is designed to protect production from these and other unforeseen risks, helping filmmakers safeguard their investment.

What is Film Insurance?

“A film/movie insurance is a type of insurance policy that protects your movie against unforeseen losses including delays of the movie due to natural calamities, unforeseen instances such as the illness of actors, damage to the equipment used in the film, third-party damages, loss due to errors and omissions, etc,” said Naval Goel, Founder and CEO of PolicyX.com.

This insurance can also cover legal liabilities arising from errors or omissions, as well as third-party damages, providing a comprehensive protection package for producers.

The unique risks for profitable companies

Interestingly, the level of profitability of a production company can affect the types of risks it faces. Highly profitable companies often take bigger risks in pursuit of growth, making them vulnerable in different ways compared to smaller, less profitable ones.

For instance, large-scale productions may face cash flow difficulties due to the accrual basis of accounting. They also rely heavily on complex supply chains and advanced technology, which can introduce additional risks. These factors make insurance even more critical for high-budget films.

“Yes, profitable companies can face different types of risks than less profitable companies, and these risks can be influenced by factors like scale, complexity, and supply chains,” said Goel.

What’s covered and what’s not

Goel explains what is covered and not covered under film insurance. Film insurance offers broad coverage to protect against a range of issues:

1. Personal accident cover for actors and crew members
2. Property damage
3. Loss of money and baggage
4. Third-party liabilities
5. Costs for reshoots caused by errors or omissions during production
6. However, there are exclusions to keep in mind. Film insurance generally does not cover:
7. Damages due to war or mechanical breakdowns
8. Wear and tear of equipment
9. Losses from inventory shortages
10. Human errors, like accidental erasure of recordings
11. Getting film insurance: companies and plans

Producers looking to insure their film can approach various insurance companies that specialize in this niche. In India, leading insurers offering film insurance include:

1. United India Insurance
2. Bajaj Allianz General Insurance
3. Future Generali
4. HDFC Ergo Insurance
5. Iffco-Tokio General Insurance Company Ltd.

Several types of plans are available, tailored to the needs of the production. These include Errors and Omissions plans, General Liability insurance, Workers’ Compensation, and Equipment Insurance. “To obtain film insurance, producers must work with licensed and authorized insurance providers who can assess the risks involved and offer suitable coverage,” said Goel.

Who pays for film insurance?

The producer of the film or TV show is responsible for paying the insurance premium. The premium is typically calculated as a percentage of the film’s overall budget, with the exact amount depending on the scale and length of the project and the types of coverage required. Larger productions with higher risks generally pay more for insurance.

Conclusion

In an industry where unpredictability is often the norm, film insurance is an essential tool for producers. It helps protect against a wide range of risks, from cast illnesses to equipment damage, ensuring that the show can go on even in the face of adversity. For anyone involved in film production, understanding the ins and outs of film insurance can make all the difference between a smooth production and a financial disaster.