Film Errors and Omissions Insurance

Film Errors and Omissions Insurance

Why do Production Companies need Errors and Omissions Insurance?

As a producer you’re exposed to a variety of risks as soon as your film is distributed. Broadcasters, distributors and financiers of film and television productions expect you as the producer to insure against these risks. The solution is to take out Errors & Omissions (E&O) Insurance prior to the distribution of your work, to cover the costs of investigation, settlements and defence if a claim is made against ‘you the producer’.

Errors and Omissions insurance protects your organisation from the financial impact of professional mistakes - either negligence or breach of contract.   

What if...

  • Someone accuses you of infringing their copyright?
  • You accidentally misuse information in a documentary or programme notes
  • Your work is deemed defamatory and you have to pay damages?

What's covered?

E&O Insurance does not cover you for costs arising from criminal charges or any deliberate wrong doing. But professional mistakes do happen, and E&O insurance can help with:

  • Infringement of any intellectual property rights – including copyright, music rights, patent, trademark; infringement of title, broadcasting cable or satellite rights, moral rights; or acts of passing off
  • Misuse of information – be it confidential or subject to any statutory restrictions
  • Defamation, libel, slander
  • Breach of confidence or infringement of privacy rights

Despite slick production management and strict legal clearances, a producer could still face legal action from an error or omission. For example, the script of your production may be slightly similar to another film or programme, or even a published novel. This could lead to a claim that you’ve committed plagiarism i.e. copied someone else’s idea, and defending yourself at court can be very costly.

The first step in arranging your E&O Insurance is to speak with an experienced insurance broker as their advice will be invaluable. They’ll ensure you get the right levels of cover, at the right premium. For example, you’ll need guidance around your “delivery requirement”, which dictates the length of the policy period. This could be 1, 3 or maybe 5 years and will be clearly stated in your distributor’s contract.

Some things to think about…

  • Timing: for financial reasons, many producers wait until delivery to the broadcaster or distributor before arranging their E&O insurance. But if a claim arises before delivery, any costs associated with defending the claim and penalties imposed will be the responsibility of the producer. If insurance is put in place after the producer is notified of a claim, it won’t cover that claim.  We’d advise placing the insurance at the planning stages of your production. As with any insurance, the best time to buy E&O Insurance is before the risk is taken.
  • Deductibles/excess: as for most insurance policies, there’s usually a deductible on E&O claims – but these can be significantly higher than other commercial policies. The level of deductible can also influence the policy premium, so ask your broker for some options to find a solution that fits best with you and any other parties involved. Bear in mind that in the event of a claim, the level of deductible you choose will be the amount that hits ‘you’, the production company, in the pocket.
  • Check your obligations: you’ll need to complete a proposal form before cover begins. You have an obligation as a policyholder to provide information that is complete, accurate and not misleading in anyway. The proposal form will include a list of requirements and clearance procedures. These procedures, as well as the clearance advice you receive from your solicitor, must be strictly adhered to. If an insurer determines that you haven’t followed the required procedures, your cover can be revoked or refused, which may affect future insurance purchases.
  • Manage your risk: talk through your risks with your broker, and work out how to protect yourself against being sued for any errors and omissions!
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Tracey McCreath ACII

DIRECTOR, MEDIA, ARTS & ENTERTAINMENT

Direct Dial: +44 (0) 1223 200655

Email: tracey.mccreath@laplayainsurance.com

Twitter: @TraceyatLaPlaya