Fireman’s Fund Launches Product for Video Gaming Industry

June 14, 2007

Novato, Calif.-based Fireman’s Fund Insurance Co. has new coverage for the video game development industry. The coverage expands on its existing offerings for film production.

According to the company, the average cost of developing game software in the early 1990s was $40,000; now it’s up to $10 million per game. With the price tag on developing game software rising, developers and publishers can use International Film Guarantors (IFG), a Fireman’s Fund subsidiary, to provide completion bonds.

“Right now, most video game producers are improperly insured as business software developers—a far cry from the realities and risks involved in creating software for entertainment,” said Joe Finnegan, vice president of Entertainment at Fireman’s Fund. With three-dimensional graphics, artificial intelligence, and enhanced voice and sound effects, the probability of loss increases. Game producers also face similar risks to that of the film industry, especially if the game is tied to the release of a major film. A developer might hire the lead actor of the film in order to film the motion-capturing components of the video game. If that actor were to be injured (on or off the set) and unable to work for several weeks, the developer would still have the expenses of the crew, equipment, and facility rental.

Fireman’s Fund provides insurance that enable developers, designers and producers to create the gaming experience without the extra risk of potential loss, the compay said.

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