A step by step guide to help you secure protection for your film production
By Winnie Wong
Producer’s Errors & Omissions insurance (E&O) is usually required by distributors prior to the release of any production. It provides legal liability coverage for claims alleging unauthorized use of titles, format, ideas, characters, and plots; plagiarism; unfair competition; liable, slander and defamation of character; or invasion of privacy. The first step to getting the coverage is to complete an application. In our 3-part blog series, Momentous Production Insurance expert Winnie Wong goes through each section of a typical application.
Name and Likeness
Is the name or likeness of any living person used in the production? Will necessary rights be obtained? The insurance company wants to know if the production company is featuring actual individuals in the film and wants to make sure that you have obtained their permission.
Is the name or likeness of any deceased person used in the production? Will necessary rights be obtained? While depicting a deceased person is less of a concern there are still remaining heirs, family members and personal representatives that need to the grant their permission.
Copyright/Chain of title
Have copyright reports been obtained? Are there any ambiguities, gaps or problems with the chain of title? A copyright report is a search of the records at the U.S Copyright Office to determine the history of a particular work being used. If you are utilizing underlying works such as books, scripts, or screenplays, you must check with the original copyright owners to make sure that another production company did not acquire rights.
Have you obtained from all writers and other content providers written warranties that the content they provide you does not infringe the rights of any third party and have you obtained an indemnity for any breach of this warranty? In a nutshell, an insurance company wants to make sure that the production company’s agreement includes a statement which confirms that the writer’s work is original and not owned by a third party. In addition, the agreement should stipulate that they would indemnify the production company if the statement was found to be false.
Have all licenses and consents been obtained from the copyright owner, any person or entity depicted in the film clip and photographs? Although film clips and photographs are not normally included in feature films, the production company will need to obtain permission from the copyright owner and permission from people being depicted in the film clip.
Have musical rights been obtained from the composer and/or performers, owners of preexisting music and/or recordings? A production company relies on third parties to either provide original music or recordings for their specific film. The production company must make sure they obtain permissions from the composer, music publisher and record company.
Once the production company decides which way to go creatively, they need to obtain music cue sheets or establish a contract that will vouch for the originality of the music.
Please note that at the time of completing your application, the insurance company is aware there will instances when you do not have the music issues finalized. In this case, the underwriter can exclude coverage for music until you confirm in a letter that all music rights have been secured.
A number of clients have released sound tracks to promote their independent film and provide another avenue to earn revenue. If this is the case, you should notify your insurance broker and get this included under the existing E & O policy. A supplemental application may be required and an additional premium may be charged.
Name of your attorney (individual’s name, address, phone no.)
A discount may apply if you utilize an experienced entertainment attorney. To the insurance company, it means you utilized an extra “pair of eyes” to manage the clearance process (i.e. obtaining necessary licenses and permissions).
Have you and your attorney read and agreed to exercise due diligence to insure that the “clearance procedures” attached are followed? The insurance company provides clearance procedures for the production company to follow. Simply said, obtaining insurance requires a partnership between the insurance company and filmmaker. The insurance company expects the production company to operate as professionals and exercise due diligence in the film making process. Due diligence is the act of performing a reasonable investigation into the facts and circumstances and perform actions to avoid harm to other persons.
Have you suffered any loss or has any claim, whether successful or not, ever been made against you that would be covered by this insurance? If yes, please attach details including the date of each claim or loss, the amount of the claim and any remedial action taken. A claim is a formal request asking for a payment. This is not normally a difficult question to answer as many times an independent film does not encounter litigious issues until the film is officially released. However, there are instances where lawsuits or disputes have occurred prior to securing Errors & Omissions. The insurance company wants full disclosure of any claims and action that and the steps taken to remedy the issues.
For example, a public figure decides to file an injunction to prevent the producers from filming. However, upon further discussions with the production company’s attorney the public figure ends up providing his life rights and contributing to the film. The production company should resolve or settle all disputes by reaching a contractual agreement and pay an agreed amount or edit the film.
In the end, the insurance company may decide to exclude any pre-existing claims. Please note that if you purposely conceal claims information from the insurance company, and it is revealed that you had knowledge prior to the placement of coverage, the insurance company can void the policy.
Are you aware of any problem which is likely to lead to you suffering a loss or a claim being made against you that would be covered by this insurance? If yes, please attach details of each problem.
This question requires you list instances that could possibly result in a lawsuit or a claim. For example, a client secured a signed deal memo/release from a public figure that was to be featured in a segment of the film. However, weeks later, the individual changed his mind and demanded that they remove his image from the film as he felt the film’s storyline was not something he wanted to be affiliated with. Ultimately, to avoid a possible lawsuit the production company agreed to remove his image.
This section has a number of warranties that the insurance company wants you to be aware of before you sign the application. For the most part the statements are primarily confirming that everything that appears on the application is true, accurate and no statements are intentionally misleading. As I stated before, the insurance company is entitled to rescind their policy if statements made on the application are found not to be true.