E&O INSURANCE COST
E&O COVERS THE PRODUCTION CO. AGAINST LAWSUITS ALLEGING UNAUTHORIZED USE.
It also protects against alleged libel, slander, defamation of character or invasion of privacy. This coverage will usually be required by a distributor, broadcaster or financier prior to the release of any theatrical or TV production. Production financing will usually not flow until E&O coverage is in force.
A producer will need to complete an application (contact david@frontrowinsurance.com for a copy).
If coverage is required for the title, you must obtain a ‘Title Report & Opinion' from a recognized Title Clearance Company offering this service and submit the report to underwriters for final approval. You will also need a clearance report.
Premiums for E&O vary based on the content of the production: a straightforward documentary would cost $3,000 to $4,000 and $5,500 to $7,000 for a feature film for the industry standard three year policy term.
Every project is unique and therefore requires a unique, custom E&O policy.
Upon receiving instructions from the Production Company to proceed, the broker will begin the clearance process. The lawyer for the underwriter will review and approve the clearances done by the producer’s lawyer. The fee for the insurance company lawyer’s service is included in the final premium. If coverage is not bound, the insurance company clearance fee (approximately $600) is payable and an invoice will be issued accordingly.
You should check your production/distribution/financing agreements regarding the start date for Errors & Omissions coverage. Some financiers require E&O coverage to be in place for the first day of principle photography before they will release payment to the producer.
It can take up to ten (10) working days for a project to be cleared and coverage to be in place, so start early to ensure that your cash flow is not impacted.
The E&O policy will provide defense costs if the producer is sued and will pay the judgment costs if the producer is found liable. Until a lawsuit happens, it provides the comfort of peace of mind.