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When a large production recently faced a threat of its film release being postponed, due to issues arising out of creative rights of a particular song, it decided to approach a law firm to handle the case. With legal costs touching Rs 35 lakhs, the producer felt that they this would over-shoot the budget. However, this financial crisis was avoided since the production house had purchased a media liability policy for the film.
Insurers have seen a rise in demand for media liability policies from production houses. With rise in the litigations prior to the release of films, industry experts said that it has become crucial for companies to take up these policies.
Media liability policy covers the legal and financial liabilities arising out of acts of errors of omission and commission by production houses, television channels and publishing houses. This covers not just the legal costs, but also the compensation (if any) that has to be paid to the other party.
This insurance protects these organisations against damages you become legally liable to pay to a third party as a result of a claim for a wrongful Act committed or alleged to have been committed by a firm, in the professional life. It includes libel, plagiarism, invasion of privacy, hurting religious sentiments, trade-secret or slander by words/music written, spoken, audible or visual materials published or broadcast.
Sushant Sarin, Senior VP-Commercial Lines, Tata AIG General Insurance said that since each film has atleast 5-10 creative rights involved in the production, it is imperative that these rights be protected. "There could be copyright claims against a production house in the court asking for a stay on the release. To avoid a stay, which will cause financial damage, production houses hire law firms to fight their case. This policy covers these expenses. Further, if the court awards some damages to the aggrieved party, which has to be paid by the production house, that amount is also paid for, by the policy," said Sarin.
He said that there is an increase in demand for this cover, taking into account the number of litigations that are filed against the film producers in court. He added that while some production houses take insurance for one film, others may take insurance for the entire bouquet of films that they produce each year.
Film producers also take a cover to ensure that the film releases on time and the financial costs are met. A senior official with a public general insurance firm said that a film's budget could go haywire, if any controversy emerges before its release. "Hence, this cover protects them from facing a financially difficult situation. The industry is seeing atleast 30-35 per cent increase in demand, with regional films also being covered for these liabilities," the official said.
Both public and private insurance companies including Tata AIG General, New India Assurance, Raheja QBE General Insurance, among others offer this cover. Industry experts said that out of the 1000 plus films produced annually, atleast half of the films take media liability cover. The total premiums for a bouquet of 100 movies would typically range from Rs 7.5 to Rs 10 crore. While regional films are also covered, the bulk of the business comes from Bollywood.
Insurance experts also said that in certain cases, to avoid financial and reputational damage, a producer could decide to go for an out-of-court settlement, instead of waiting for the final court order. In these cases too, the policy will ensure that the expenses are covered.
Films and the controversies that surrounded them:-
Vishwaroopam: Prior to its release, there were issues including alleged potrayal of a community in negative light and decisions to release it on DTH first. The release of the film was delayed.
Billu: The film had faced a backlash from certain sections of the population over the use of the word 'Barber' in its title. The word was later removed from the title.
My Name is Khan: Shiv Sena party staged a protest against the release of the film, after the film's lead actor Shahrukh Khan made a remark on Pakistani cricket team members not being a part of the IPL. The issue was resolved and film was released on time.
Black Friday: A film based on the 1993 Mumbai serial blasts, this film's release was stayed till the verdict on the blasts case was given
Fanaa: This film was banned in Gujarat for some time, after its lead actor Aamir Khan was seen with the protestors of Narmada Bachao Andolan. However, the ban was subsequently removed.
Fire: Some activists threatened to stall the screening of the film over the potrayal of lesbian relationship. This issue was resolved.
Jodhaa Akbar: Some members of the Rajput community raised questions about the historical accuracy of the movie. This issues was resolved.
Aaja Nachle: This movie's screening was banned in some states for a few days over alleged casteist remarks in a particular song's lyrics. This was revoked after the lyrics was changed.
Jo Bole So Nihaal: The film's release was delayed in some states after Sikh protestors raised objections over the use of a Sikh religious phrase in its title.
