Bollywood is still insurance shy

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It’s moment of truth for Star Plus

: With top Bollywood stars Sanjay Dutt and Salman Khan flitting in and out of jail, many producers are having sleepless nights. Consider this: Dutt, who is out on interim bail, may have to go back to Yerwada jail as soon as the final blasts’ judgement is handed over to him. He has many unfinished projects at hand, including Alibaug, the Rs 50-crore home production with producer Sanjay Gupta, Sanjay Gadhvi’s Rs 35-crore Kidnap, Mehbooba directed by Neeraj Vohra, Mr Fraud and a host of others.

According to industry estimates, there’s Rs 500-crore riding on both Salman Khan and Dutt put together. And yet, most of their projects are most likely not insured. The question is at a time when general insurance companies have joined the bandwagon of insuring films—a trend which began with Subhash Ghai’s Taal few years ago—why are most filmmakers still insurance-shy?

The fact remains that even though insurers are vying with each to insure films, they have not been able to tap the flourishing Hindi film industry, which grossed Rs 5,000 crore in 2006. Still, only one out of every 10 films being produced opt for film insurance.

The main obstacle lies in the nature of insuring a particular film.

While underwriting a film insurance policy, the insurers cover things like reimbursement of expenses incurred by the producer due to the death of principal stars, loss or damage to sets, wardrobes, costumes machinery, equipment owned and destroyed due to fire and other perils, as well as theft.

But they do not cover the loss incurred by the producer when the actors, they have signed for, go to jail leaving a number of their film projects unfinished. According to an insurance official, “We do not cover uncertainty, although we cover death or illness. Actually, insurance is more of a civil liability.” Loss of expenses due to a film star being in jail cannot be covered under the film insurance policy.

Although there is no clear-cut policy on the subject, insurers point out that they “cover accident, but criminal intent is specifically removed from all our books”. A document by the state-run United India Insurance Company, which in fact started the film insurance business by underwriting Mukta Arts’ Taal, is quite vague on the topic. It only says that “loss caused by insured person taking part in any hazardous activity is excluded from the scope of cover of the film insurance policy”.