Errors & Omissions insurance

Entertainment lawyers are often called upon to help clients obtain Errors & Omissions insurance for their productions. This job is easy if the needs of E&O insurers are considered before production begins. However, the process can be difficult and time-consuming if no thought is given to E&O coverage until after the final cut is locked.

E&O Insurance covers claims against a production, including breach of copyright or trademark, breach of privacy, defamation and breach of contract. These claims do not usually surface until there has been a broadcast or exhibition of the production.

E&O coverage is not included in the standard production insurance that is taken out for injuries, damage to property, etc. Only occasionally do you hear about the types of claims for which E&O insurance provides protection. For example, an action was brought several years ago against Dreamworks by an author who had written a book about the events depicted in the feature film Amistad. The author claimed that her copyright had been breached because the film told the story in ways which were similar to the book. More recently, one of the characters depicted in the recently released feature film Boys Don’t Cry has brought an action for breach of privacy because of the manner in which her life was depicted.

But most claims do not make headlines; usually they are threatened and then settled. Even if your insurer is ultimately successful in defeating a claim, it can still be costly because of the legal fees involved. And even if a claim is settled, the producer generally pays.

There are only a small number of insurers who provide E&O insurance to the entertainment industry. These policies are sold by specialized agents who are familiar with film and television production. If you have been involved in producing a documentary or television production, you have probably filled out the lengthy forms involved in making an E&O application. The application tells the agent how far along you are in the production and what the problem areas are likely to be, but it also serves as a handy checklist for you. Once the application is received, the agent will provide you with a quote and hand it over to lawyers who provide advice to the insurer about the risks involved with the production. The insurer will have its lawyer contact production counsel to review the potential problem areas and to discuss how these will be addressed.

The advantage of having your lawyer speak directly to the insurer’s lawyer is that often E&O insurance can be approved with a single phone call. The disadvantage from a lawyer’s perspective is that you sometimes end up doing the insurer’s dirty work by telling a client why certain material can’t be used. Because the insurer’s lawyer relies on production lawyers to decide whether to grant insurance, your lawyer is obliged to identify problem areas. If they do not, you (and the broadcaster) could end up being liable for the omission and your lawyer’s credibility can be affected.

Conflicts can often be avoided if production counsel are brought in early to review potential issues. Your lawyer can then serve as your advocate with the insurer to argue for the inclusion of material which is controversial and, where necessary, to negotiate a compromise that both the producer and insurer can live with.

The most common complaint from the insurer’s side is that these applications are often left to the end; sometimes just days before a production goes to broadcast. Such last minute pressures are the last thing a producer needs after making it through production, and they leave a bad impression with both insurers and broadcasters.

The pricing for E&O insurance is somewhat subjective and depends on factors such as the type of production, the subject matter, the track record of the producer, etc. If you are requesting insurance for your first production, it is a good idea to get more than one quote.