This Article is From Aug 13, 2011

Insurance cos have reservations with Jha's Aarakshan

Highlights

  • When the screening of a film is in jeopardy after its release, distributors usually rely on insurance to make up for their losses.
  • 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.
Mumbai: When the screening of a film is in jeopardy after its release, distributors usually rely on insurance to make up for their losses.

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.
.