Media Obligation Insurance FAQ
Answers to the most common questions about media obligation insurance, payment risk, and how this product protects cash flow lenders.
Everything you need to know about media obligation insurance: what it covers, who it is for, how it works with completion bonds, and what the claims process looks like. Over 30 questions answered by the Intectus team.
General
General Questions
Frequently Asked Questions
What is media obligation insurance?
Media obligation insurance protects cash flow lenders against non-payment and delayed payment from film distributors and government incentive bodies after a production has been completed and delivered. It is an insurance product developed by Intectus specifically for the entertainment finance industry.
Who is this product for?
Cash flow lenders and financiers who lend against distribution agreements or government incentive entitlements in the entertainment industry. If you advance capital against contractual receivables from distributors or incentive bodies, this product protects you against the risk that those payments do not materialise.
Is Intectus the only provider of this product?
Yes. Intectus is the only provider of dedicated media obligation insurance for cash flow lenders against post-delivery non-payment from film distributors and government incentive bodies. No other product in the market addresses this specific risk.
Why does this product exist?
Because standard trade credit insurance does not serve the entertainment finance space. Conventional trade credit insurers cannot assess entertainment obligors. Film distributors are not rated like commercial buyers, the asset class is unfamiliar, and the obligor structures are too complex for generic credit models.
How is this different from trade credit insurance?
Standard trade credit insurance covers commercial receivables in industries where buyers have standardised credit ratings and familiar business models. Entertainment receivables, from film distributors, government incentive bodies, and co-production entities, fall outside those models. Media obligation insurance is specifically designed for the obligor types, contract structures, and risk profiles found in entertainment finance.
Coverage
Coverage and Scope
Frequently Asked Questions
What risks are covered?
Non-payment and delayed payment from film distributors and government incentive bodies. This includes distributor insolvency, illiquidity, and contractual default, as well as government incentive budget cuts, administrative delays, and political risk.
What is NOT covered?
Two key exclusions: (1) Production non-delivery: if the production is never completed and delivered, this policy does not apply. That risk requires a completion bond. See our Completion Bond FAQ for details. (2) Payments not yet due: coverage activates only when the contractual payment obligation has been triggered.
What are the coverage limits?
Up to €5 million per distributor and up to €10 million per government incentive. The minimum insured obligations are €3 to 4 million per production.
Which countries are covered?
Distributors from all non-sanctioned countries worldwide. Government incentives from EU countries, the UK, Canada, Australia, New Zealand, and selected countries in South America and Asia. Incentives from other countries are assessed on a case-by-case basis.
What types of productions are eligible?
Feature films, television series, animation productions, and documentaries with minimum insured obligations of €3 to 4 million.
Can I insure receivables from just one distributor?
Yes. The policy can cover one distributor, multiple distributors, government incentives, or any combination, as long as the minimum total insured obligations threshold is met.
Completion Bond
Relationship With the Completion Bond
Frequently Asked Questions
How is this different from a completion bond?
A completion bond guarantees that the production will be completed and delivered. Media obligation insurance guarantees that the lender will be paid after delivery. They cover different risks at different stages of the production lifecycle. For detailed questions about completion bonds, see our Completion Bond FAQ.
Do I need a completion bond to get media obligation insurance?
Not strictly, but it is strongly recommended. Media obligation insurance requires the production to be delivered before coverage applies. Without a completion bond, there is no guarantee that delivery will happen, which increases the risk and may affect the terms.
How do the two products work together?
The completion bond ensures the production gets made and delivered. Media obligation insurance ensures the lender gets paid once delivery has occurred. Together they cover the full risk chain of entertainment finance, from capital deployment through to repayment.
What if the production has a completion bond from another provider?
That is acceptable. The media obligation insurance policy does not require the completion bond to be provided by Intectus, though we will review the bond terms and the guarantor's track record as part of our due diligence.
Complementary Coverage
The completion bond covers production risk (will it be completed?). Media obligation insurance covers payment risk (will the lender be paid?). Together, they address the full lifecycle of entertainment finance risk.
Cost
Cost and Premium
Frequently Asked Questions
How much does media obligation insurance cost?
The premium is a one-time, all-inclusive charge based on the specific production and its insured obligations. Due diligence, obligor assessment, legal review, and monitoring are all included. There are no additional charges. Contact us for a quote.
Is the premium a one-time payment?
Yes. The premium is paid at policy issuance and covers the full policy term. There are no recurring payments or renewal fees.
Is there a minimum insured amount?
The minimum insured obligations are €3 to 4 million per production.
Are there any additional fees beyond the premium?
No. All due diligence, obligor assessment, monitoring, and claims handling is included in the premium. There are no separate charges for any element of the service.
Process
The Process
Frequently Asked Questions
How quickly can I get a feasibility assessment?
Within forty-eight to seventy-two hours of providing basic information about the production and its receivables.
How long does the full process take?
From initial approach to policy issuance, typically four to six weeks with complete documentation. The main variable is the completeness and quality of the documentation provided.
What documentation is required?
Production documents (script, budget, schedule, financing plan), distribution contracts with delivery terms and payment schedules, incentive documentation, the complete financial structure, obligor assessment materials, and confirmation of complementary insurance.
What happens if the feasibility assessment is negative?
We will explain the reasons. Common reasons include insufficient creditworthiness of key obligors, ineligible incentive programmes, or fundamental issues with the production's viability. If conditions change, you are welcome to reapply.
What reporting is required during the policy term?
Regular production progress reports, notification of any material changes to distribution or incentive agreements, delivery confirmations, and payment status updates. Specific requirements are set out in the policy.
Claims
Claims
Frequently Asked Questions
What triggers a claim?
A claim is triggered when a covered payment is not received by the contractual due date, after the policy's defined waiting period has elapsed.
What are the conditions for a claim to be paid?
Five conditions must all be met: (1) the production has been completed and delivered, (2) the payment is contractually due, (3) the payment has not been received, (4) no policy exclusions apply, and (5) all required documentation has been provided.
How long does the claims process take?
This depends on the circumstances of the default and the complexity of the recovery efforts. The policy defines specific timelines for each stage of the claims process.
What happens after a claim is paid?
The insurer acquires subrogation and recovery rights against the defaulting obligor. This means the insurer pursues collection from the party that failed to pay. The lender is not involved in recovery.
What if the distributor pays after a claim is filed?
If payment is received after a claim has been filed, the timing determines the outcome. If it arrives before the claim is paid, the claim may be withdrawn. If it arrives after the claim is paid, the recovery is handled through the subrogation process.
Have a Question Not Listed Here?
Contact us directly. We are happy to discuss media obligation insurance for your specific financing structure.