CoronaVirus Outbreak: Insurance Companies Will Not Claim Losses Due To Stalled Films And Deferred Releases

CoronaVirus Outbreak: Insurance Companies Will Not Claim Losses Due To Stalled Films And Deferred Releases
CoronaVirus Outbreak: Insurance Companies Will Not Claim Losses Due To Stalled Films And Deferred Releases

Coronavirus pandemic has forced Bollywood to stand still. With no releases and shutting down of the cinema hall is effecting the business a lot. The trade experts are pegging the potential losses at over Rs 800 crore. While Angrezi Medium which was opened in theatres a day before shutdown. However, it was covered by insurance for Distributors Loss of Profit/Revenue.

But things didn’t go like this with other releases and halted productions. Rohit Shetty’s Sooryavanshi which was supposed to hit the screens on March 24 got postponed following the pandemic.

A senior official working for an insurance company that also sells policies for films was quoted by a daily as saying, “Since February, Coronavirus is excluded as a clause for any loss incurred by filmmakers during production. Film releases being postponed or filming rescheduled due to the outbreak are not covered by the policies. While epidemics are usually covered when policies are sold to the clients, Coronavirus has been excluded from pre-existing conditions. It’s like an insurance company won’t cover costs of a surgery if you buy a policy after diagnosis and learn that you need to undergo one.”

The insurance policies cover losses like riots, curfews, strikes, bandh calls and unexpected natural calamities, insurance companies are currently non-committal on the issue of production work that was halted following the directive from film bodies.

Sumant Salian of Alliance Insurance Brokers said, “As of now, no one knows the quantum or severity of the loss. But our clients have been calling to ask about all the scenarios in which they are protected. Since February, all policies issued for films have a specific exclusion endorsement which underlines that anything arising directly or indirectly from Coronavirus is not covered. Our clients tell us that they will curtail losses by managing things with their vendors. Since they’ve had a long association, vendors are understanding and making adjustments in their own way. Deferring shoot schedules is a precautionary measure and delaying releases is a commercial call. As a prudent citizen or a businessman, if I take the call to be ready to take a hit on business because I don’t want to risk my employees, it is a precautionary measure. Likewise, deferring a release when the situation is adverse around a pre-decided data is voluntary. Distributors Loss of Profit/Revenue policy comes into effect only after the film releases.”

Sumant adds, “Theatres have staff on rosters, so they are bound to pay salaries even if they are shut for a month or so. Moreover, they have fixed costs like rent, electricity, and maintenance. In the industry, apart from a considerable number employed with production companies on monthly salaries, light men, set workers, and spot boys, among others, are daily wage earners. They will be hit the most.”

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