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?.

Requesting anonymity, an insurance official of a state-run general insurance company said: ?We have not received any claim from a film producer because the actor of the film had landed in jail.?

He simply means that this part is deleted while underwriting a film for insurance. So, while development officer of United India Insurance, Ajit G Gupta, claimed that the company has underwritten the Dutt-starrer Dhamaal, set for a September 7 release, he is quick to add that ?we have covered only the film shooting place, props, equipment and others and the loss, if any, incurred by the producer of the film thanks to Sanjay?s going to jail or any other such reason, is not covered under the policy?. Gupta said that his company has paid only 17%-18% as claims of the gross premium collected by the film insurance business by his company so far.

Still the hard truth remains that some of the big producers like Ram Gopal Varma, whose Ram Gopal Varma Ki Aag has been a disaster at the box-office, does not go for film insurance for any of his films.

The general manager, marketing, United India Insurance, V Harshavardhan, said his company has been insuring films since the past five to seven years and notable Hindi films that they have insured include Taal, Black, Chak de India and Saanwariya. Regional films include Shankar Dada and Lakshyam in Telugu, Billa, Ayudham Seivom and Vazhthukkal in Tamil. ?We have also covered television serials like Indian Idol and Big Boss and Sa Re Ga Ma,? he added.

The company has insured a good number of films from the stables of Yash Chopra, Bobby Bedi, Karan Johar and Ramesh Sippy.

United India Insurance has under-written films like Kuch Na Kaho, Taxi No 9211, Mohabbatein and Madhur Bhandarkar?s recent hit film Corporate starring Bipasha Basu.

In fact, the company had to pay a large sum as insurance claim when the production of the film could not take place for a certain period of time because Bipasha fell ill. In a similar case, the company had to pay claims of Rs 45 lakh after a fire broke out on the sets of Black in Goregaon (Mumbai). In yet another case, the insurer had reimbursed an undisclosed amount to producers of the TV quiz programme Kaun Banega Crorepati when Amitabh Bachchan who was anchoring the show could not turn up for shooting for a certain period of time due to his illness.

Bajaj Allianz General Insurance Co is another firm that is also into the film insurance business in a big way. It has witnessed a 50% increase in premium during the year 2006 and expects a premium growth of 30% for the next few years. Although the state-run Oriental Insurance Company ventured into the film insurance business by underwriting a Hindi film few years ago, it has restricted its business to insuring star nights and cricket matches since then.

Another state-run New India Assurance Co insured the Rajnikanth starrer, Sivaji The Boss. Hindi films like Babul and Baghban are some of the Bollywood films that have been insured by New India Assurance Co. Normally, the premium charged by an insurance company for insuring a film comprises 1%-1.5% of the total budget of the film.

Some insurance companies admit that the film insurance business is yet to take off in India. According to Neeraj Kumar, general manager (technical), Oriental Insurance Co, ?The film insurance business has just taken off for us and we are ready to underwrite such policies whenever opportunity knocks on our door.?

Even though the Kolkata-based insurance firm, National Insurance Co, has some experience in insuring regional films, it has almost stopped looking into the direction. The general manager and financial advisor of the company argued that, ?We are more into retail and not really, the film industry. The second reason is that insurance penetration in the Bengali film industry is quite low.?

Tracing the history of film insurance, Harshavardhan said: ?In the beginning, only Hindi film producers were opting for film insurance and subsequently regional language film producers also followed suit.?

However, he is hopeful that the increasing professionalism and corporatisation of film production business as well as the availability of bank finance are factors that will increase the demand for film insurance.

Now when corporate houses like Reliance Entertainment, UTV, Pritish Nandy Communications, Percept Pictures are coming forward to produce films in an organised way, there lies a ray of hope for the film-insurance business. Another move that can give a fillip to the film insurance business is the proper rating of a film by an accredited agency which will make the insurers? job of underwriting the films, which they often term as ?dynamic risk?, an easier one.