Posted by David Hamilton on Wed, Sep 26, 2012 @ 08:33 PM
Much like the producer's E&O insurance, distributor's Errors and Omissions (E&O) insurance covers distributors from lawsuits that may arise due to the content of the material they are distributing.
Distributor's E&O insurance differs from Producer's E&O in that distributors are insured for a list of titles they are distributing. In order to add a production to a distributors E&O policy a minimum of one year of E&O policy needs to have been in force. For each film that you distribute, you will need to ask for evidence of previous e&o coverage.
The premium is determined by the estimated annual revenue that is expect from the list of titles to be insured. A deposit premium is paid and then the deposit is adjusted at the end of the policy year based on actual distribution revenue. A distributors policy is typically much less expensive as compared to extending individual e&o policies. The adjustment rate is usually 10 cents per $1000 of revenue.
To get a quote, we will need to have an application completed and we will need a list of the titles to be covered. Would you like me to send you a copy of a blank application?
WHY E&O POLICIES ARE NEEDED?
- Ie. The script of your movie/show is slightly similar to another production, therefore a claim for plagiarism could arise.
- Covers the insured against defamation, libel and slander suits
- Covers against intellectual property rights
- Typically most distributors and broadcasters will not distribute or air any production without it.
- It protects a company or individual from financial loss.
TYPICAL E&O CLAIM SCENARIOS
- An action brought against a production company for the production of a movie which is similar to events depicted in a novel.
- A defamation/slander suit brought against a production company based on a recognizable likeness between a fictional character in a tv series and an actual person.
- A production company is sued for unauthorized use of Titles and/or Music/Stock Footage, for not acknowledging underlying works such as books, scripts of screenplays or for not requesting permission to acquire rights
Posted by David Hamilton on Mon, Jul 23, 2012 @ 02:06 PM
This article is an excellent introduction to what is and what is not covered by a Film Producers e&o Insurance Policy.
The author is an attorney that has spent a considerable amount of time working with the Canadian Film and Television industry. She has represented international film insurance companies for over 30 years.
Also discussed in the article:
Overview of Clearance Procedures
- Standard Film and TV Clearance Produres
- Docudramas
- Documentaries
- Fair Use: Criticism and Parody
- Minimizing The Risk Of Copyright and Submission Claims
- Companion Materials, The Digital Age and More
Posted by Monica Cervantes on Tue, Jul 10, 2012 @ 06:31 PM
CLAIMS MADE E&O POLICIES
Claims Made E&O Policies cover claims that are made during the policy term. The loss may have occurred in the past, but as long as it is reported during the current policy term, it can trigger coverage. In order for coverage to continue, the policy must stay in force.
With this type of policy, endorsements can be made so that the policy responds to incidents which occurred before the policy start date, also known as “Prior Acts” coverage. Tail Coverage is another extension that can be obtained wherein the insurer will cover events that occur while the policy is in force, but which the insured is unaware of during the policy period, and are reported to the insurer after the policy terminates. By obtaining tail end coverage, the claims based policy is in effect converted to an occurrence policy.
Pro’s of a Claims Made E&O Policy
A benefit of this type of policy is that if a claim arises relating to incidents which occurred before the policy start date, the claim may be covered. Another reason why this type of E&O policy is purchased is because it is less expensive than occurrence based policies. Typically the premium increases over the first five years of coverage in increments proportional to the claims reporting for that experience.
Con’s of a Claims Made E&O Policy
Once a “claims-made” policy has expired, purchasing insurance for past events will become difficult, expensive and perhaps not possible. Once coverage has expired, claims can no longer be submitted, even if the claim occurred during the policy term.
OCCURRENCE BASED E&O POLICIES
Occurrence based E&O policies cover losses that occur during the policy term as long as the project/film is released or broadcast during the dates at which an incident causing damage occurs. Although the loss can be reported years later, it must have “occurred” during the policy term. This type of E&O policy may not cover occurrences that happened prior to the policy being in force.
Pro’s of an Occurrence Based E&O Policy
A benefit of this type of policy is that there is no need to renew the policy to maintain coverage. Also, years after this type of policy has lapsed, a claim can be made for incidents that occurred while the policy was in force.
Con’s of an Occurrence Based E&O Policy
This type of E&O policy is typically more expensive than claims based policies because the insured is prepaying for tail costs whether the tail gets used or not. Another disadvantage is that if a claim arises before delivery to the broadcaster or distributor, any defense costs associated with the claim may not be covered. It’s important to speak with your broker about whether Prior Acts coverage is included on your Occurrence Based Policy.
WHY E&O POLICIES ARE NEEDED?
- Ie. The script of your movie/show is slightly similar to another production, therefore a claim for plagiarism could arise.
- Covers the insured against defamation, libel and slander suits
- Covers against intellectual property rights
- Typically most distributors and broadcasters will not distribute or air any production without it.
- It protects a company or individual from financial loss.
TYPICAL E&O CLAIM SCENARIOS
- An action brought against a production company for the production of a movie which is similar to events depicted in a novel.
- A defamation/slander suit brought against a production company based on a recognisable likeness between a fictional character in a tv series and an actual person.
- A production company is sued for unauthorized use of Titles and/or Music/Stock Footage, for not acknowledging underlying works such as books, scripts of screenplays or for not requesting permission to acquire rights.
WHAT CAN AFFECT THE COST OF AN E&O POLICY?
- Whether an attorney’s services were used to secure clearances and licenses
- The coverage limits
- Coverage Territory
- Type of distribution
- Type of production ie. Documentary, TV Series
- Subject matter of production
- Production Budget
Posted by Doran Chandler on Tue, Mar 20, 2012 @ 05:02 PM
It happens more often than you might expect: a producer completes a film, locks picture, makes a sale, and then drops by our law office to inquire about “clearing” the film for Errors & Omissions insurance coverage. In reviewing the film, we note that the producer filmed copyrighted and trademarked material, but failed to get the necessary permission to include it in the film.
E&O insurance policies insure against claims arising from accidentally infringing a copyright or trademark, invading someone’s privacy or otherwise getting tripped up on someone else’s rights. In order to qualify for E&O coverage, the film in question must be fully cleared and the producer must acquire all necessary permissions from third parties whose rights might otherwise be infringed. If a film includes material that potentially infringes a third party’s copyright and permission has not been acquired, there are a number of options to consider.
First, the film could be edited to remove the offending material. This is only a viable option if time, finances and/or creative willingness permit. Second, there may be an exception allowing the inclusion of certain copyrighted material in the film without permission.
Likely the most popular excuse for copyright infringements is the concept of “fair use”. Although referred to regularly in industry reference materials available here in Canada, fair use is a US principle based on the belief that it is not “fair” to find every copying to be a violation of copyright law if such copying was for certain purposes, including criticism or review. (For example, the concept of “parody” falls under fair use in the US and has provided many a filmmaker with substantial sources of otherwise protected material. Thank you Mel Brooks and Mike Myers!)
Fair use does not exist in Canada and is often used interchangeably, and often confusingly, with “fair dealing”, the concept found in the Canadian Copyright Act. Other than in very clear-cut cases, extreme caution must be used in relying on fair dealing, which is a very limited defense as the use of the material must be for “private study, research, criticism, review or newspaper summary”. Unfortunately, because there are no hard and fast rules available, it is impossible to define what is and is not fair dealing.
Other than fair dealing, in Canada, the concept of “incidental inclusion” may provide another possible exception to copyright infringement. If the use of copyrighted material is very minor and is incidentally and not deliberately included, (for example, a pre-existing credit card door sticker at a retail location), it is likely that the use will fall within incidental inclusion and will not be considered an infringement. It can become prohibitively expensive and time consuming to clear every protected item in a film, no matter how small the use.
If E&O insurance is required, and if none of the above options is feasible, in some cases it may be possible to “exclude” the offending material from the E&O insurance policy and effectively assume the risk yourself. (Be aware, however, that these types of exclusions may not be acceptable to broadcasters and distributors.)
The bottom line? Always, always, always ensure that you acquire all necessary permission to include any protected material in your film before you start shooting.