How Media Obligation Insurance Works
Five stages from initial approach through due diligence, underwriting, and claims management.
Media Obligation Insurance protects cash flow lenders against non-payment from film distributors and government incentive bodies after a production has been completed and delivered. The process from initial enquiry through to policy issuance typically takes four to six weeks.
48–72 hrs
Feasibility assessment turnaround
2–4 weeks
Due diligence period
4–6 weeks
Total process to policy issuance
50%+
Enquiries declined at feasibility
Stage 1
Initial Approach
The lender or financier contacts Intectus to discuss a production they are considering financing. At this stage we need a high-level understanding of the deal.
Production type and scale
Feature film, TV series, animation, or documentary and approximate budget
Lending structure
What receivables the loan is secured against
Key distributors and territories
The distribution agreements that generate insured receivables
Government incentives
Any incentive programmes included in the financing plan
Expected timeline
From lending through production to expected repayment
No Documentation Needed Yet
We can have an initial conversation based on high-level information. No documentation is required at this stage. If the deal looks promising, we move to a formal feasibility assessment.
Stage 2
Feasibility Assessment
Within forty-eight to seventy-two hours, we provide an initial assessment of whether the production and its receivables are suitable for coverage.
Production viability
Is the production viable and likely to be completed and delivered?
Counterparty creditworthiness
Are the distribution contracts with creditworthy counterparties?
Incentive eligibility
Are the government incentives from eligible programmes?
Receivables structure
Is the overall receivables structure insurable?
We Are Selective
More than fifty percent of enquiries are declined at this stage. We are selective because the quality of our risk assessment is what protects both the lender and the insurer. Early declination saves time and cost for everyone.
Stage 3
Due Diligence
For productions that pass the feasibility check, we conduct thorough due diligence across five areas. This typically takes two to four weeks, depending on complexity and documentation completeness.
Production Viability
Can this production be completed and delivered? We assess the script, team, schedule, budget, and financing structure. If the production carries a completion bond, we review the bond terms.
Contractual Analysis
Are the distribution contracts enforceable? Are the terms clear, the obligations binding, and the payment triggers well-defined? We review every contract that generates an insured receivable.
Commercial Assessment
Are the revenue projections realistic? We evaluate the distribution plan against market conditions, comparable sales, and territory-specific factors.
Obligor Assessment
Can the distributors and government bodies actually pay? We evaluate the financial standing, track record, and creditworthiness of each obligor.
Collateral Review
What recourse exists if something goes wrong? We assess the underlying rights, the chain of title, the security structure, and the recovery options.
Stage 4
Underwriting and Policy Issuance
Based on our due diligence findings, the risk is evaluated and the policy is structured. The policy is issued once all conditions are met and the premium is paid.
Coverage limits
Per distributor and per incentive body, based on the insured obligations
Policy term
Aligned to the expected payment timeline from delivery through collection
Conditions and exclusions
Specific to the production, its obligors, and the receivables structure
Premium
One-time, all-inclusive premium covering all services
Stage 5
Monitoring
Throughout the production and post-production lifecycle, we monitor progress and require regular reporting from the producer. When payments fall due, we track collection.
Production progress
Tracking completion and delivery milestones
Agreement changes
Any changes to distribution agreements or incentive conditions
Obligor health
The financial health and status of key obligors
Delivery and acceptance
Delivery milestones and formal acceptance by distributors
Payment collection
Tracking payments after delivery and triggering the claims process if needed
When Payment Becomes Due
Payment Path Flowcharts
The policy activates when a contractual payment obligation has been triggered: the production has been delivered and accepted, and the payment date has arrived. Two distinct paths apply depending on the type of receivable.
Distributor Payments
If the distributor declines delivery because the production does not meet agreed specifications, the insurer is off risk. Non-delivery is the completion bond's responsibility, not MOI.
Government Incentives
If the government body declines the audit because the production did not meet incentive conditions, the insurer is off risk. Compliance with incentive conditions is the producer's responsibility.
Claims
The Claim Process
When a covered payment is not received, the claim process follows a defined sequence.
Default Notification
The lender notifies Intectus that a payment has not been received by the contractual due date.
Assessment
We investigate the reason for non-payment: has the obligor acknowledged the debt? Is it a temporary delay or permanent default? Are there disputed delivery issues?
Recovery Efforts
Reasonable efforts are made to collect the payment from the obligor, including direct negotiation, formal demand, or engagement of local counsel.
Claim Determination
Five conditions must all be met: production completed and delivered, payment contractually due, payment not received, no exclusions apply, and all documentation provided.
Payment
Once the claim is approved, payment is made to the insured (the lender) according to the policy terms.
Subrogation
The insurer acquires the right to pursue recovery from the defaulting obligor, including finding replacement distributors or pursuing legal recovery.
The Lender Is Protected
After a claim is paid, the lender is not involved in recovery. The insurer handles all recovery efforts directly, including finding replacement distributors or pursuing legal action against the defaulting party.
Policy Term
Insurer's Rights During the Policy
The insurer retains certain rights throughout the policy term to protect the insured receivables.
Replacement distributor
If a distributor defaults or shows signs of financial distress, the insurer may work to find a replacement for the affected territory
Alternative incentives
If a government incentive programme is compromised, the insurer may identify alternative incentive options
Recovery and subrogation
After a claim, the insurer pursues full recovery from the defaulting party
Information rights
The insurer can request information about production progress, delivery status, and obligor financial health
Complementary Products
How MOI Works With a Completion Bond
The two products are designed to work together, covering different risks at different stages of the production lifecycle.
| Phase | Risk | Product |
|---|---|---|
| Production | Will the production be completed? | Completion Bond |
| Post-delivery | Will the lender get paid? | Media Obligation Insurance |
Different Risks, Full Coverage
Media obligation insurance explicitly excludes non-delivery. If the production is never completed and delivered, the policy does not apply. That is the risk a completion bond addresses. A completion bond is not required for media obligation insurance, but together the two products can cover the full lifecycle of entertainment finance risk.
Common Questions
Frequently Asked Questions
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.
What happens if I am declined at the feasibility stage?
We will explain the reasons for the declination. Common reasons include insufficient creditworthiness of obligors, ineligible incentive programmes, or a production that is not viable. If conditions change, you are welcome to reapply.
Can I get MOI without a completion bond?
In principle, yes. The policy covers payment risk after delivery, regardless of whether the production carries a bond. However, the absence of a completion bond increases the risk that the production will not be delivered, which may affect the risk assessment and terms.
How long does the full process take?
From initial approach to policy issuance, typically four to six weeks if documentation is complete. The main variable is the completeness and quality of the documentation provided.
What reporting is required during the policy term?
Regular production progress reports, notification of any material changes to distribution agreements or incentive conditions, and confirmation of delivery milestones. The specific reporting requirements are set out in the policy.
Discuss Your Financing Structure
Contact us to discuss whether your production's receivables are suitable for media obligation insurance coverage.