Prakash Jha's film has been unable to acquire a policy to cover Distributors' Loss of Profit because of the controversies plaguing it before and after its release
Prakash Jha's film has been unable to acquire a policy to cover Distributors' Loss of Profit because of the controversies plaguing it before and after its release
When the screening of a film is in jeopardy after its release, distributors usually rely on insurance to make up for their losses.
Protestors burn effigies of Prakash Jha, demonstrating
their disapproval for the film
However, Aarakshan, which released yesterday, couldn't benefit from the policy covering Distributors' Loss of Profit (DLOP) owing to the string of controversies that have been plaguing the movie.
Unless the film releases in Uttar Pradesh, Punjab and Andhra Pradesh, where the respective state governments have currently banned its screening, producer-director Prakash Jha could well be counting losses on the Rs 50-crore venture, said trade analysts.
A well-placed source at Reliance Entertainment, through which Jha is distributing his film, informed MiD DAY that no insurance company was willing to sell the DLOP policy to the director.
Explaining why the film failed to get an insurance cover, sources said "Aarakshan has been caught in controversy since long before its release, so the companies felt insuring it was a risky proposition."
Aatur Thakkar of Alliance Insurance Brokers said that one cannot insure a house against fire when it is already ablaze.
"You can buy insurance for covering a probability, not when the prevalent circumstances increase the probability of a loss," he pointed out, adding that it is better to adopt a risk management philosophy and transfer the risk before any problem crops up.
Asked if the fear of such bans by state governments and political parties could translate into directors not taking up such subjects for movies, Thakkar averred that there are policies to cover political disturbances, like those used in the case of My Name Is Khan and the recently released Singham.
Policy Matters
"Once the film has been cleared by the Censor Board, you can opt for a policy that covers such bans.
But, various aspects are considered to decide the sum covered and the premium to be paid, like budget, genre, sensitivity of the subject, distribution plans and past history," Thakkar elaborated.
It's not difficult to answer why anyone would go for insurance cover.
"Only when they foresee a loss," prompted Thakkar, adding that special conditions require higher premiums. "That is why we recommend a risk transfer philosophy on an annual basis to our clients."
Meanwhile, the Supreme Court will hear Jha's case on screening Aarakshan in UP, Punjab and AP on Tuesday.
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