Rajinikanth's Lingaa gets mega-insurance cover of over Rs 200 cr

Superstar Rajinikanth's upcoming film Lingaa that is set to hit the theatres on December 12 has secured a mega-insurance cover including production insurance and loss of revenue for India and overseas.

Industry estimates suggest that the size of the cover would be well above Rs 200 crore. This includes Rs 100 crore plus for production cover, apart from coverage against force majeure incidents that could disrupt the screening of the film. The film, shot in a record span of eight months, has reportedly been made on a budget of Rs 100 crore.

Sumant Salian, Head-Media and Entertainment, Alliance Insurance Brokers said, "Rajini sir's Lingaa has a higher production insurance cover than other films of South India. The film was also wrapped up in record time. They have also covered loss of revenue for overseas, since his films are very popular abroad."

According to the current insurance norms, insurance companies compensate the production house for delays and losses due to adverse weather conditions, natural disasters, damage to property/sets, and injury to actors during film shoots. Sudden illness of the main cast of the film due to food poisoning is also offered relief under this policy.

A decade ago, the film insurance segment was dominated by public general insurers. But now, private general insurers have also entered the scene. Film insurance, which was once considered an additional burden for film producers, has now become a norm.

Now that both public and private general insurers are actively offering products catering to the needs of the film industry, the share of film insurance in the overall insurance business could touch 8-10 per cent in the next 3-5 years, say experts. At present, it accounts for about two per cent of the industry's total business. Apart from Bollywood movies, several South Indian movies are also heavily insured.

Claim payments have also been on the rise with several recent cases of fire on sets and actors falling ill during shoot leading to delay and non-appearance clause of insurance is invoked.

As a concept, film insurance came into existence in the early 1990s. 'Taal' was one of the first movies to be insured. When Sanjay Dutt was arrested during 'Khalnayak' , this prompted Subhash Ghai to insure his next movie 'Taal' for which he paid Rs 15 lakh as premium for the film valued at about Rs 11 crore.

Ever since Taal was insured, more and more producers have rushed to insure their movies. These policies cover loss to life or property on film sets. It also covers legal issues related to a film as well as post-release issues such as theatre shutdown due to riots or strike.

Exclusions include acts of terrorism, perilous activities, disappearance, unexplained inventory shortage, war or invasion. Some policies also cover advance paid to stars.

A senior executive looking into miscellaneous lines of business in a public general insurer said that the stakes are very high in a Rajini film especially since a megastar is involved. "With his films making good business in South East Asia, US and UK, it was imperative to take an overseas insurance cover as well.

In film insurance policies, the type of cover depends on the budget of the film. The premium for such a policy is usually 1-2 per cent of a film's budget. If the total budget of a film is Rs 100 crore, for instance, the premium would be Rs 10-20 crore. While submitting a request for insurance, the production house should give details of the budget including money paid to the actors, apart from the shooting schedule and location.