Does film producer's E&O insurance protect against claims of breach of contract?

Posted by Kailin Che on Apr 21, 2020 8:00:30 AM

DOES film producer's E&O INSURANCE PROTECT AGAINST CLAIMS OF BREACH OF CONTRACT?

WHAT TO KNOW ABOUT IMPLIED-IN-FACT AGREEMENTS | IMPLIED CONTRACTS | IMPLIED TERMS

E&O INSURANCE FILM | ERRORS AND OMISSIONS INSURANCE FILM:


Kailin Che (Lawyer)
: An E&O policy does not cover claims relating to breaches of contract, e.g., if a producer breaches a contract provision with a writer, that won’t be covered by E&O insurance. There is a narrow exception to this rule and that’s in implied-in-fact agreements; those will be covered by E&O insurance.

So, a producer must assess whether or not there were any implied contracts that were established through conduct. Often, people think submission of an idea is sufficient to constitute implied-in-fact contracts; that’s not correct.

there are two clear requirements for establishing implied-in-fact contracts:

  1. the person who is sharing the idea must express the expectation to be compensated prior to sharing or if they share the idea.
  2. the recipient, e.g., the producer must know that there is this expectation of compensation and then voluntarily accepts the receipt of the idea.

So, in terms of limiting your potential liability in an implied-in-fact agreement, it’s possible if a producer ensures that every person who comes before them to submit any sort of idea signs an Idea Release Submission Form. [template credit: Early Sullivan Wright Gizer & McRae LLP]

 

Related:

About: Kailin Che is a corporate/commercial lawyer who represents clients in a broad range of industries including, technology, entertainment, manufacturing and real estate. She has advised clients on a variety of endeavors, including mergers and acquisitions, financing, reorganizations, corporate governance and regulatory compliance. Kailin began her legal career at a global law firm in Toronto and is licensed to practice in both Ontario and British Columbia.

Topics: Film Producer's E&O Insurance, Film Insurance claims

E&O considerations for US-based filmmaker vs. Canada-based filmmaker

Posted by Kailin Che on Apr 17, 2020 11:07:17 AM

Fair use vs. fair dealing

Are there different e&o considerations for a US-based filmmaker vs. a Canada-based filmmaker?

E&O INSURANCE FILM | ERRORS AND OMISSIONS INSURANCE FILM:


Kailin Che (Lawyer)
: There are definitely differences in the applicable laws affecting E&O considerations between US and Canada. A lot of these are nuanced, but to give you an example: we’re talking about exceptions under copyright infringement as set forth by the fair use doctrine and so in the US, the fair use doctrine is a lot broader than the Canadian fair dealing doctrine equivalent.

Copyright and fair use:

Under the US copyright law, they have a non-exhaustive list of potential purposes that could be used as an exception, e.g., if it’s a comment or criticism, or for the purpose of news reporting, these are all things that would NOT constitute an infringement on copyrighted material.

Fair dealing copyright | fair dealing guidelines | fair use fair dealing:

In Canada, we have a similar provision but an exhaustive list. So, it is limited to private study research, parody and satire, etc. So, the consequence of this is that, for producers, they might potentially be found to have infringed on copyrighted material in Canada, but perhaps they’re not infringing in the US.

So, that said: most people who are making films are distributing in Canada and the US anyway, so it’s important to be compliant with both sets of laws and regulations. And, typically, if you buy insurance in the US, it’ll cover Canada as well.

 

Related:

About: Kailin Che is a corporate/commercial lawyer who represents clients in a broad range of industries including, technology, entertainment, manufacturing and real estate. She has advised clients on a variety of endeavors, including mergers and acquisitions, financing, reorganizations, corporate governance and regulatory compliance. Kailin began her legal career at a global law firm in Toronto and is licensed to practice in both Ontario and British Columbia.

Topics: Film Producer's E&O Insurance, US Film insurance broker, Fair Use Doctrine

How does an E&O clearance process protect against claims of libel?

Posted by Kailin Che on Mar 13, 2020 7:40:38 AM

How does an e&o clearance process protect against claims of libel and slander?

WHAT TO KNOW ABOUT E&O INSURANCE AND LIBEL / SLANDER / DEFAMATION

E&O INSURANCE FILM | ERRORS AND OMISSIONS INSURANCE FILM:


Kailin Che (Lawyer)
: Depending on the policy, E&O insurance should also provide defense and indemnification for claims relating to defamation and in order for a defamation claim to exist, there must be a defamatory statement that’s been published to a third party relating to a specific person and it must be construed as defamatory for a “reasonable person”/outside party.

Typically, a statement can be considered defamatory if it has the tendency to lower a person’s reputation in the community. But defamatory statements aren’t limited to what’s expressed in words; it can also be expressed by photography or even cartoons.

The general rule is that you’re only responsible for the defamatory statements that you publish; e.g., if you publish a defamatory statement and someone else republishes your original statement, any damages relating to this publishing of a defamatory statement will be attributed to the republisher and not to the original author of the statement. With that said, there are always exceptions.

 

Related:

About: Kailin Che is a corporate/commercial lawyer who represents clients in a broad range of industries including, technology, entertainment, manufacturing and real estate. She has advised clients on a variety of endeavors, including mergers and acquisitions, financing, reorganizations, corporate governance and regulatory compliance. Kailin began her legal career at a global law firm in Toronto and is licensed to practice in both Ontario and British Columbia.

Topics: Film Producer's E&O Insurance, Film Insurance claims, defamation insurance

How does an E&O clearance process protect against plagiarism claims?

Posted by Remy Khouzam on Feb 3, 2020 8:25:33 AM

How does an E&O clearance process protect against plagiarism claims?

E&O insurance film | errors and omissions insurance film:


Remy Khouzam (Lawyer)
: When discussing a project, a lawyer and his client (the producer) will have to look at various things regarding the nature of the project itself; for example:

  • Is it an original project?
  • Is it a project adapted from previous work?
  • Who collaborated on these projects?

The idea is: you can work on these things based on warranties and representations that are in the contract(s) of your various project contributors that will basically represent that their contribution is original and wasn’t taken from a third-party source. So, there’s no consent necessary and they own all the rights to grant them to the producer. So, that’s basically the work that is done and the sort of guarantees you need in order to obtain E&O coverage.

Related:

About: Lussier & Khouzam is a Canadian law firm specialized in Arts and Entertainment law. Visit their website at https://lussierkhouzam.com/.

Topics: Film Producer's E&O Insurance

Why do we need to answer ALL the questions on an E&O application?

Posted by Steve Fraser on Jan 27, 2020 10:48:53 AM

Why do we need to answer ALL the questions on an E&O application?

what are lawyers looking for in the responses?

E&O INSURANCE FILM | ERRORS AND OMISSIONS INSURANCE FILM:


Steve Fraser (Lawyer)
: ALL the questions on an E&O application should be answered because they all reflect something that the insurer needs to know, but most of all, it’s an administrative thing. If you don’t answer all the questions, and you’re in a hurry, it’ll slow down the process.

E&O can be very easy to obtain if you answer all the questions as completely as you can and that also means you can add to the application. Just because the application doesn’t include a line that says “this will be obtained…”, you can actually write that in. That’s probably one of the biggest things that producers should pick up: do a FULL application but also – if you’re concerned about how an answer looks – add information. You can either write it onto the application itself, or you can do it as an addition to the application.

When some of the projects are complicated like, for example, treaty co-productions or just co-productions in general and there’s more than one person who is Named Insured, put it on a separate sheet. It is so much easier to have it all in one place than to have to go chasing after it. It’s better for you and for everybody involved in the E&O insurance process.

Related:

About: Stephen "Steve" Fraser is an international entertainment business and legal affairs lawyer in the film and television industries with co-production, financing and distribution experience.

Topics: Entertainment Insurance, Film Producer's E&O Insurance, Film Production Companies

Script Clearance and Title Search Report Cost

Posted by Anne Marie Murphy on Jan 20, 2020 8:31:01 AM

SCRIPT CLEARANCE and TITLE SEARCH REPORT COST

SCRIPT CLEARANCE REPORT COST

SCRIPT CLEARANCE REPORT COST

Script clearance reports give you a detailed list of all the story elements in your project that might cause problems in any of these categories:

A "clearance" or "script clearance" company will read the script and make a list ("clearance report") of all the places in it where there could be legal trouble. Then, they'll research all those items and present you with notes on what looks safe ("clear") to use and what might get you into some problems ("not clear"). Look for a company that will suggest solutions as well, among them providing contact information for rights holders and presenting you with "clear" alternatives for scripted items that are problematic.

As in most industries, the faster you need the work done, the more it will cost. Most script clearance companies have a range of turnaround options for a feature film report, ranging from a few days to a few weeks. You can expect to pay anywhere from $1000 to $3000 (Canadian dollars) for the first full report on a feature film script, depending on the turnaround you need and the company you hire. [U.S. title search prices range from $275-$1250.]

Additional billing often follows when more requests come from both the art department (names to use on signage and props) and the story department (revised drafts and/or one-off name changes to be checked).  Script clearance companies bill in different ways for that follow-up work (by the hour, by the item), so consult with them regarding procedures to find the best way forward for the way you work. 

A theatrical feature that is heavy on art department requests + has many rewrites that need review can run up a bill of well over $5000 for clearance work.

Clearance reports for a TV series are not typically prepared in the same short time period as they are for a feature film report (during a weeks-long shoot).  A television series can have a production schedule that stretches for many months and the script clearance reports will be generated when each episode goes into production. Here too, there can be many sets of revisions and many art department requests.  The art department clearances for episodic series work can be much heavier in the first season of the show when set dressing is going up for the first time.

The cost for these series reports is usually billed per episode (rather than for a full season) and vary depending on the length of the script. You might pay $100 for a report on a short 10-page web series or kids' animated show, but on the other end of the spectrum, a one-hour episode script might run you closer to $1000. Another added cost for series work is if you need your reports done faster than the usual promised turnaround times; that can add 50% to the price. This sometimes comes into play with web series projects that might not be aware of the E&O requirement for script clearance reports until just before they start shooting.

There are several script clearance companies based in Canada and plenty in the U.S., where the reports were first developed in the early 1950s. You'll have plenty of options for finding a company that offers what you need. Most clearance companies have a rate sheet they'll share upon request while others  will only quote on a per-project basis. You'll obviously want a company that has a good track record over a long period of time and probably one that has its own E&O coverage.

Another thing to ask for if your project will be on a streaming service is, "have you worked already for [Netflix, Apple TV, Hulu, etc.]?" Some of those companies have a long-ish vetting process for service providers with whom they are unfamiliar. That's something to keep in mind.

Sometimes a project doesn't need an entire script "cleared" but instead has just a few names that need to be researched. Depending on the company, this type of request is billed at either an hourly or a per-item rate. This approach can work well for a cash-strapped project that has experienced production personnel who can read the script and send the notes needed for the clearance house to do their work. Assuming that the art department personnel are well aware of the intellectual property issues involved in dressing a set, sending only a short list of character names out for clearances can be an excellent low-budget solution.

TITLE SEARCH REPORT COST

Pricing on title search reports is a lot less complicated than for script clearances. Simply stated: for any given title, you'll need to select the turnaround time and the geographic scope of the report. Again, the faster you need the work done, the more it will cost. Unlike a script clearance report – in which the scope of the search is determined by the geographic setting of the story – the production's distribution plan dictates the scope of the title search.

If production counsel feels strongly that the broadest possible scope is needed, then that will add to the cost of the report. The broader the scope, the more sources are consulted and the cost increases with additional research time involved. 

A title search report of limited scope at a longer turnaround time might come in at less than $300. However, once you add in a speedier delivery and your lawyer or broker's insistence on a more robust geographic scope, a title search report can cost upward of $3000.

There are even more options for providers of title search reports in North America than there are for script clearance reports, so shopping around would be wise. When in doubt, the wisest route is often picking the company that comes best recommended to you. As with any professional service provider, a referral from a company that has a long and solid track record with another company is invaluable.

Another difference between title search reports and script clearance reports is the opinion factor. Good clearance reports offer plenty of opinions about what is and is not "clear." Title searches, on the other hand, have "just the facts, ma'am." The research company is not authorized to provide you an opinion on whether the title is clear for use. That has to come from a lawyer.

SCRIPT CLEARANCE RESEARCHER / TITLE SEARCH COMPANY

Eastern Script specializes in providing research services for the entertainment industry, including script clearances and title searches. Visit their website here: https://www.easternscript.com/

Guest post by Anne Marie Murphy
amm@easternscript.com
(844) 842-3999

Related Posts:

Topics: Entertainment Insurance, Film Producer's E&O Insurance, Title reports, Script Clearance reports

Why are certain questions asked on an E&O application?

Posted by Steve Fraser on Jan 8, 2020 10:50:01 AM

Why are certain questions asked on an E&O application?

what are lawyers looking for in the responses?

E&O INSURANCE FILM | ERRORS AND OMISSIONS INSURANCE FILM:


Steve Fraser (Lawyer)
: Certain questions are asked on an E&O insurance application to help the insurance company or their counsel to gauge whether the production may be riskier than others. On the one hand, it’s a risk assessment but on the other hand, it’s also a way to check to make sure that the way that they’ve answered the question reflects that they’re aware of what the clearance procedures are and that they will follow them.

Sometimes, the entertainment lawyer who is clearance counsel for the production also signs the application or there’s a place where that lawyer has to acknowledge that they’ve seen the application. But, no surprise, it’s just a way to figure out who might think that they don’t need to comply with some of the clearance questions.

So, one of the E&O application questions is: “Is there a possibility that a living person could claim (without regard to the merits of such claim) to be identifiable in the Insured Production, whether or not that person’s name or likeness is used in it or whether or not the Insured purports it to be fictional? If “yes” has a release been obtained from such person?”

Well, if there is a possibility of something like that, we want to know about it upfront but also, that question tends to segue into: “are you getting releases? Is production doing what it needs to do to make sure that the folks who are appearing on screen (usually documentary, but also for dramas where you need performer agreements) are following what production says they will follow?"

Related:

About: Stephen "Steve" Fraser is an international entertainment business and legal affairs lawyer in the film and television industries with co-production, financing and distribution experience.

Topics: Entertainment Insurance, Film Producer's E&O Insurance, Title reports, Film Production Companies

How can a film producer protect themselves from an E&O claim?

Posted by Steve Fraser on Jan 6, 2020 8:53:11 AM

How can a film producer protect themselves from an E&O claim?

FOLLOW THE E&O CLEARANCE PROCEDURES

E&O INSURANCE FILM | ERRORS AND OMISSIONS INSURANCE FILM:


Steve Fraser (Lawyer)
: A film producer can protect himself, herself or itself (because most producers incorporate) by following the clearance procedures that are included with your E&O application and/or E&O policy.

So, get yourself an entertainment lawyer, take a look at those clearance procedures, make sure you’re following them and you will avoid claims forever. The other thing you should do is get friendly with your insurance broker – they’re very helpful.

Related:

About: Stephen "Steve" Fraser is an international entertainment business and legal affairs lawyer in the film and television industries with co-production, financing and distribution experience.

Topics: Entertainment Insurance, Film insurance broker, Film Producer's E&O Insurance, Title reports

Why Does a Film Producer Need E&O Insurance?

Posted by Remy Khouzam on Jan 3, 2020 6:35:17 AM

Why does a film producer need Errors & Omissions (E&O) insurance?

Why is E&O necessary from a legal perspective?

E&O insurance film | errors and omissions insurance film:


Remy Khouzam (Lawyer)
: The reality of the North American market, at the very least, is that E&O insurance is required and producers must obtain it because broadcasters, distributors, public sector financiers, etc. will require it.

So, why is it a good idea for a producer to get E&O insurance apart from the fact that they have to? It protects them in case of a claim under trademark infringement, copyright infringement, invasion of privacy, defamation issues and these claims can be very expensive and costs can rise quickly. Having the E&O insurance in place will allow you to cover those costs.

Related:

About: Lussier & Khouzam is a Canadian law firm specialized in Arts and Entertainment law. Visit their website at https://lussierkhouzam.com/.

Topics: Film Producer's E&O Insurance, Script Clearance reports, defamation insurance, Trademark, legal expense

E&O: Are There Different Things Needed for a Documentary vs. a Drama?

Posted by Remy Khouzam on Dec 16, 2019 11:43:55 AM

E&O: Are There Different Things Needed for a Documentary vs. a Drama?


Remy Khouzam (Lawyer)
: From an errors and omissions (E&O) perspective, you have to look at the project based on what challenges it presents. So, a documentary will have different legal concerns than a drama.

E&O Insurance and Documentaries

For documentary, we’ll mostly be looking at privacy issues, potential defamation issues and – more and more now – just because budgets are being cut and the price of archives is going up – filmmakers are using the copyright exception of fair use (fair dealing under Canadian law) to use clips, lawfully, without having to clear them with rights holders. So, obviously, this brings some challenges from a legal perspective that are not exclusive to documentary but clearly appear more in documentary settings than they do in fiction.

E&O Insurance and Fiction Films

For fiction, most of it will be based on copyright issues, trademark and consideration as to what the characters are saying because you could cross that line into defamation. Those would be the major differences – you cover all legal bases but the emphasis is put on different areas, depending on the nature of the project.

Related:

About: Lussier & Khouzam is a Canadian law firm specialized in Arts and Entertainment law. Visit their website at https://lussierkhouzam.com/.

Topics: Film Producer's E&O Insurance, Documentary Insurance, Script Clearance reports, defamation insurance, Trademark, Fair Use Doctrine