Aside from the motion picture studios, insurance companies also stand to benefit from increased consumer spending.

Motion picture insurance is a potentially high-reward yet high-risk segment of the insurance industry. A typical entertainment insurance policy is basically an all-risk insurance policy covering all aspects of video production, from the production equipment to the people involved.

While the association between insurance and video production is not the first thing to come to mind, the fact is, no motion picture can ever get off production without an  insurance policy in place. It has always been the case since the 1920s. The reason is obvious, there is a lot of money to be lost in video productions – from the equipment to the actual film. The risks are high, especially in the case of action movies. The premiums on a policy typically outweigh the risks involved. A regular policy comprises 3% to 5% of a motion picture’s total budget, the riskier videos would cost 20% to 50% more.

Movie and video insurance did encounter a downtime in demand after the September 11 bombing. People were less confident in spending their money in watching the videos, and less ticket sales led to less motion pictures being made. Insurance providers, on the other hand, found a more profitable venture in insuring buildings and property instead.

As consumer spending shifts to more relaxing priorities such as movies and DVD's, insurance providers are being lured to insure video productions again. The lure of Hollywood is shining brightly as before. With these bright prospects, the pizzazz of motion picture productions insurance is set to sizzle more.

You can see more actors in lead roles being insured or more E&O policies being written for film studio execs.