What is E & O Insurance? Does my production require E&O? What should I be budgeting for E&O? And…. who can help me figure it all out?
E&O stands for Errors and Omissions Insurance… which is producer’s liability insurance. Whether or not you think it’s worth the fees and time, if you plan to have your production broadcast on television or exhibited in theatres, you will likely be told that it’s necessary.
E&O generally covers lawsuits relating to content contained in your production. For example, claims of defamation, invasion of privacy, right of publicity, infringement of copyright and trademarks, and unauthorized use of titles. It doesn’t cover contract-related claims (for example, an actor sues the producer for non-payment), wrongdoing or fraud by the producer, etc.
While E&O might not be top of mind in pre-production, it should be to save time and money in the long run.
The following are general tips to think about early on that should help keep insurance premiums down and policy exclusions to a minimum:
- Ensure everyone who contributes to the production, from the scriptwriter to the crew, signs an appropriate contract, or waiver of rights.
- Ensure all actors and other recognizable people provide permission to appear in the production.
- Ensure you understand all of the music rights you need to obtain and get those rights granted.
- If you have a composer, ensure there’s a clause in the agreement requiring that she indemnifies the production regarding her contributions infringing the rights of others.
- If you plan to use stock footage, there’s a bundle of rights to consider – from the creators to the owners to all of the music rights holders.
- Obtain written permission if there are distinctive locations, buildings, businesses, personal property or brands on screen.
- If you intend to have companion material, such as web-only content, give it the same scrutiny as the rest of the production’s content.
- Purchase a script research report before filming to alert you to potential problems including names of fictional characters that are coincidentally similar to real people, as well as uses of copyrighted or other protected materials.
- Ensure rights are granted to the correct entity and that all rights granted are assignable.
- Ensure your crew, appearance and other agreement templates have been approved by your lawyer.
- As releases are signed, ensure they are safely secured and scanned.
Before producers pay everyone from key creatives to the crew, producers have leverage to get everything signed that needs to get signed. Leverage is lost months or years later, after everyone has been paid, when the project has an opportunity to make a big sale requiring E&O, and the producer needs waivers signed.
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As for the E&O-related costs, there’s the insurance premium to get the coverage, the cost of a title report from a title clearance services, and, possibly, a script research report and legal fees.
The role of a lawyer is to help make certain that the production contains no material that could give rise to a claim, from a missing link in the chain of title, to music that wasn’t but should have been cleared. Your lawyer will identify the risks, work with you to remove the risks from the production, and/or speak with legal counsel for the insurance company and/or the exhibitor to find a solution.
To learn more, and to help plan a proactive E&O strategy, request an E&O application from a Canadian entertainment industry E&O insurance broker. Review the questions and the clearance guidelines. At the very least, don’t read the E&O application for the first time when you need the policy in place a week later.
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© 2015 Edwards Creative Law, LLP
Updated to May 7, 2024
Edwards Creative Law is Canada’s Entertainment Law Boutique™, providing legal services to Canadians, and international clients who partner with Canadians, in the Film & Television, Music, Video Games and Apps, Publishing and Literary industries.
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* This blog is for general informational purposes only and is not to be construed as legal advice. Please contact Edwards Creative Law or another lawyer, if you wish to apply these concepts to your specific circumstances.
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