Media Obligation Insurance
Protection for cash flow lenders against non-payment from film distributors and government incentive bodies after delivery.
When you finance a film or television production, you lend against contractual receivables: distribution agreements and government incentive commitments. But between disbursement and payment, twelve to twenty-four months can pass. In that window, distributors can default, become insolvent, or simply fail to pay. Government incentive programmes can face budget cuts, administrative delays, or political changes. Standard insurance does not cover these risks.
The Only Dedicated Product of Its Kind
This is the only dedicated media obligation insurance product available in the entertainment market. Standard trade credit insurers do not serve this space. Media obligation insurance is a standalone product and does not require a completion bond.
The Problem
The Payment Gap
Film finance follows a predictable pattern. A lender provides capital against contractual receivables. The payments come back 12 to 24 months later, sometimes longer. During this gap, the lender is exposed to real and varied risks:
Distributor Insolvency
The distributor goes out of business before the payment falls due.
Distributor Illiquidity
The distributor is still operating but cannot meet its payment obligations when they come due.
Distributor Default
The distributor simply refuses to pay, triggering a contractual dispute.
Incentive Budget Cuts
A change in policy reduces or eliminates the incentive programme the production was counting on.
Administrative Delays
Bureaucratic processing extends the payment timeline well beyond what was expected.
Country & Political Risk
Political instability, sanctions, or regulatory changes affect the payment environment.
Market Gap
Why Standard Insurance Does Not Work
No Standardised Credit Scores
Film distributors are not rated the way traditional commercial buyers are. There is no Dun & Bradstreet score for a mid-tier European distributor.
Complex Obligor Structures
The parties who owe money are a mix of private companies, public broadcasters, government agencies, and co-production entities across multiple jurisdictions.
Unfamiliar Asset Class
The underlying collateral is intellectual property: film rights, distribution agreements, and incentive entitlements. This is not an asset class generic insurers understand.
Cash flow lenders to the entertainment industry have been underserved. Media Obligation Insurance was built to fill that gap.
Coverage
What Media Obligation Insurance Covers
Distributor Contracts
Coverage up to €5 million per distributor. Applies to distributors in all countries except sanctioned territories.
Government Incentives
Coverage up to €10 million per incentive. Applies to incentive programmes in the EU/Europe, the UK, Canada, Australia, New Zealand, selected South American and Asian countries.
€3–€4M
Minimum per production
€5M
Max per distributor
€10M
Max per incentive
All-inclusive
One-time premium
Boundaries
What Is Not Covered
Production Not Delivered
MOI covers payment risk after delivery. If the production is never completed, this product does not apply. That is the risk a completion bond addresses. A completion bond is not required for MOI, but for comprehensive protection a financier may choose to combine both.
Payment Not Yet Due
Coverage activates only when the contractual payment obligation has been triggered, meaning the production has been delivered and accepted, and the payment date has arrived.
How These Risks Relate
A completion bond covers production risk; media obligation insurance covers payment risk. They address different stages and can be combined for comprehensive protection, but MOI does not require a completion bond.
| Completion Bond | Media Obligation Insurance | |
|---|---|---|
| Protects against | Production failure | Payment failure |
| When | During production | After delivery |
| Core risk | Will the production be completed? | Will we get paid? |
| Primary audience | Investors in production | Cash flow lenders |
Assessment
Risk Assessment
Every production we consider undergoes detailed risk assessment across five areas:
Production Viability
Can this production realistically be completed and delivered? We assess the script, the team, the schedule, and the financial plan.
Contractual & Legal
Are the distribution contracts and incentive entitlements enforceable? Are the terms clear and the obligations binding?
Sales Estimates
Are the revenue projections based on realistic market assumptions? We assess the commercial viability of the distribution plan.
Obligor Assessment
What is the track record of each obligor? We assess payment history, reliability, and overall profile of each distributor and government body.
Collateral Strength
What recourse exists if something goes wrong? We assess the underlying rights, chain of title, and recovery options.
Process
The Insurance Process
Feasibility Check
Typically completed within 48 to 72 hours. More than 50% of enquiries are declined at this stage. Selectivity protects both the lender and the insurer.
Detailed Due Diligence
Comprehensive review of production, distribution, incentive, and financial documentation.
Underwriting
Based on due diligence findings, the policy terms are structured and the coverage is issued.
Ongoing Monitoring
Regular progress reports from the producer, with the insurer retaining rights to pursue alternatives if needed.
Payment & Claims
Coverage follows two paths, distributor contracts and government incentives, each with specific trigger points after delivery.
Claim Payout Conditions
- The production has been completed and delivered
- The payment is contractually due
- The payment has not been received
- No policy exclusions apply
- All required documentation has been provided
After payout, the insurer acquires subrogation and recovery rights against the defaulting obligor.
Benefits
Benefits for Financiers
Non-payment protection
Transfer the risk of distributor and incentive body default away from your balance sheet.
Portfolio expansion
With payment risk mitigated, you can lend to more productions and diversify your portfolio.
Deep due diligence
Every production undergoes detailed risk assessment by specialists who understand entertainment finance.
Active monitoring
Ongoing oversight throughout the production lifecycle, not just at policy issuance.
Recovery rights
If a claim is paid, the insurer pursues recovery. You are not left managing collection.
Insurance Backing
Specialist Underwriting
Media Obligation Insurance is underwritten by a specialist insurer with experience in entertainment finance. Intectus provides the risk management expertise: due diligence, obligor assessment, and ongoing monitoring throughout the policy term.
For details on our insurance backing and underwriting capacity, please contact us.
Frequently Asked Questions
What is media obligation insurance?
A specialist insurance product that protects cash flow lenders against non-payment from film distributors and government incentive bodies after a production has been delivered.
How is this different from trade credit insurance?
Standard trade credit insurance does not cover the entertainment industry's unique payment structures. Media obligation insurance is purpose-built for film distribution and incentive payment risks.
Does MOI require a completion bond?
No. Media obligation insurance is a standalone product. A completion bond guarantees production delivery; MOI protects against non-payment after delivery. They cover different risks at different stages and can complement each other, but MOI does not require a completion bond to be placed.
These are a few of the most common questions. For the full list covering coverage, process, claims, and more: See all MOI FAQs →
Get Started
Interested in media obligation insurance for your lending? Here is what happens next:
Step 1
Contact our lead placing broker, Lilley Plummer (LP Risks), who coordinates all media obligation insurance placements. You can also reach us through the contact page.
Step 2
We assess your production and obligor profile for feasibility.
Step 3
You receive an initial feasibility indication within 48 to 72 hours.