When Bipasha fell ill

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The insurance company coughed up big bucks to cover the cost

After corporatisation, cheque payments, and pre-launch marketing, insurance is the next new thing in Bollywood. In the past, producers and film financiers have insisted on insurance against accidents or deaths for their movies, but now they are going the whole hog. Everything is insured – cast, crew, props, sets, err, the entire movie. Obviously, the premia depends on the budget and the stars. The bigger the stars, the more expensive the movie, the more the producers need to shell out for insurance cover.

Insurance first started with Subhash Ghai’s Taal and later was adopted as a security by all leading film makers. This year, movies like Chak de and Saanwariya joined the list. Even regional films (including Telugu, Tamil and Bhojpuri) and TV serials are being insured. In fact, insurers have designed special packages for soaps, where annual revenue projections are used to finalise premium amounts.

Agrees Kabir Khan, director, Kabul Express, “We insured the entire film. Thankfully, we didn’t need to claim anything.” Says Anurag Basu, who produced Life In a Metro, “Film insurance is a must as life is so uncertain and unpredictable. Anything can happen – the stars can fall ill, the set can get burnt. I think my movie was insured for Rs 5.5 crore.” A source in Shree Ashtavinayak Cinevision admits that “insurance is good if you look at it from the filmmakers’ perspective.”

Industry sources however contend that Ram Gopal Varma, despite becoming a virtual movie factory, doesn’t believe in insurance. They add that only one out of 10 Hindi films is insured. Hence, there is a huge untapped market given the fact that Hindi movies grossed over Rs. 5,000 crore in 2006. Explains Shubho Shekhar Bhattacharjee, CEO, Planman Motion Pictures, “Lots of people don’t opt for insurance even now. But I feel it is absolutely necessary.”

The other problem that producers face is the potential loss of profits or revenues due to criminal uncertainties. Even as the fates of stars Sanjay Dutt and Salman Khan hangs in balance, their films have been delayed because of either court hearings or time spent in jail. Industry estimates put the combined budget of their films at Rs. 500 crore and each day’s delay is a cost. However, insurers don’t offer insurance against such delays.

Despite such issues, film producers are slowly, but steadily, realizing the positives of insurance. For example, it is rumoured that Madhur Bhandarkar claimed insurance when his star, Bipasha Basu, fell ill during the shooting of Corporate. Insurers paid a hefty Rs. 45 lakh when a fire gutted the set of Black. Even the producers of TV quiz show Kaun Banega Crorepati were paid when host Big B couldn’t shoot for some time because of his illness. The last word on the subject comes from Planman’s Bhattacharjee. “If I could get one thing covered as a producer, I would want to claim money for loss of time.” Who knows, insurers may well start considering this request in a few years’ time.

Neha Sarin

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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