Charles Maxwell, Sales Executive at Marshall & Sterling Insurance gave an overview of Errors & Omission Insurance at an informal meeting of the Rochester Documentary Group on Thursday, November 17.
Because of the risk-oriented nature of media, there are different types of insurances that are recommended, including general liability and production insurance. Errors & Omission insurance is one of the more important, since it offers protection for the violation of other’s rights. This type of coverage can protect against such claims as:
- Invasion of privacy
- Failure to attribute authorship or provide credit
- Breach of a license to use a third party’s intellectual property
- Infringement of copyright, trademark, title, slogan and misappropriation of ideas
- Breach of agreement to maintain confidentiality of sources
- Unfair competition or conspiracy
- Other occurrences that can cause another party to bring a lawsuit.
Charles shared examples where lawsuits were brought, and which would be covered under Errors & Omission Insurance.
- In 2006, Michael Moore put out a call for stories to be used in the film Sicko, comparing the U.S. healthcare system with Britain’s. In response, the friend of a man named Ken Aronson sent a video about how a shoulder injury was treated in a British hospital. Moore used 71 seconds of the video in his film, after which Aronson brought a lawsuit, claiming copyright and privacy infringement. The case was settled for an undisclosed amount.
- A wedding videographer was sued by a couple who claimed the wedding video was of such poor quality that it caused defamation of character.
- An actor who was hired to participate in a training video brought suit against the production company for alleged mental anguish caused during the filming of the video.
- A film and video producer was sued for a children’s program in which pornographic material was inadvertently included.
- When excerpts of speeches made by a politician were included in a documentary without permission, the politician brought suit, based on the fact that he claimed his speeches were copyrighted.
Charles suggested some tips and insights when considering the purchase of E&O insurance for media production:
- Off premises liability insurance may be included in general liability insurance, but if it is not, be sure to request an endorsement for it.
- When purchasing Errors & Omission insurance, it is important to review the insurance. Be sure that there is sufficient detail in the conditions so that the contract cannot be misinterpreted.
- The time to make sure you have Errors & Omission Insurance is after the film is made, but before the film is shown, even at festivals. He noted that before a project is shown, it is important to make sure you secure all releases.
- Errors & Omission Insurance is purchased on either a per project basis, or on an annual basis.
- For Errors & Omission Insurance, there is generally a $1K to $5K deductible. It is possible to purchase insurance with no deductible, but the lower the deductible, the higher the premium.
- The cost of E&O insurance is weighted against estimated revenues. Policies generally run between $1200 and $2500, but run much higher for high stakes commercial films. General Liability Insurance is less expensive and could start around $200.
- A good E&O policy should cover a lawsuit brought by international sources, but the purchaser should be sure to review coverage for exclusions.
- If a freelancer is subcontracting to a media company undertaking the project, the contracting media company should maintain all appropriate insurance, but the subcontractor would be wise to maintain separate coverage.
- Under E&O insurance, if a suit is brought, legal fees will be included in coverage.
Members of the group spoke about the importance of setting up a company structure, such as an LLC or corporation, that would protect the individual against damages, should a lawsuit take place.
For additional information on customized insurance solutions for film makers and media studios, or to request a proposal for insurance covering media risk, Charles may be reached at:
Marshall & Sterling Insurance
585.454.7800, x 217 (office)
205 St. Paul Street, Suite 105
Rochester, NY 14604
by Carol White Llewellyn