Obtaining an E&O liability insurance policy is an important part of film production. Most events aren’t planned, which means you need to be prepared to defend your production company against potential lawsuits.
An E&O liability insurance policy protects the production company, and everyone who worked on the project, from lawsuits alleging unauthorized use.
An example of “unauthorized use” could be failure by production staff to obtain permission in writing to use any of the following:
- Sound of any person or brand product
It may feel hard or even sometimes impossible to get written permission for all of the above, and that is why an E&O liability insurance policy is a must-have for your film production company.
Giovanni Cuarez, our in-house film insurance specialist, gives us the run down on all we need to know about buying an E&O liability insurance policy.
10 Most Frequently Asked E&O Liability Insurance Policy Questions
Q: How do I get an E&O liability insurance policy for my movie?
A: The first step to buying an E&O insurance policy is to contact us for a quote! Below is a list of items we will need from you:
- Completed E&O insurance policy application
- Provide the Insurance Requirement from your Distributor or Network
- Obtain a Title Search Report
- Obtain a Legal Opinion Letter from the attorney that conducted the title search of your film
Q: What is a Title Search Report and how much does it cost?
A: A Title Search Report is something that a company or industry lawyer conducts to find out if any other project out there has a similar title to your film. All distributors and networks want your film to have a unique title. They also want to be aware of other films which might pose treat of a lawsuit against your title. This could happen if the name has already been copy-written or registered. The cost to conduct the search varies and is determined by the Clearance/Title Search Company.
Below is a company you can contact to obtain the Title Report:
Q: So why do I need it?
A: If you want your film to make it to the big (or little) screen, Distributors and Networks will require production companies to provide proof of an E&O liability insurance policy. They want to make sure that your film or project has insurance protecting against any lawsuits for unauthorized use. If you are unsure how much insurance to purchase, check with the distributor or network.
Q: How much does it cost?
A: Costs vary based on the limits required by the distributor or network. Pricing also changes based on the set budget. Below is an example of a common scenario for many “low budget, indie films.” Example below.
$1,000,000 per occurence
$10,000 deductible per claim
3 year period coverage
Your budget: $250,000
Estimated premium: approx. $4,000
Q: Can I get an E&O liability insurance policy for free?
A: Yes and no. You can always ask a distributor or network to pick up the cost of the E&O liability insurance policy premium. But keep in mind that the distributor or network will recoup that cost from the sales revenue of your film.
Q: Are deductibles required?
A: Yes. At this point, all E&O liability insurance policies require a deductible. A typical deductible is $10,000 per claim. This means, your production company is financially responsible for the deductible amount. Lower deductible amounts are available, but that will cause the premium to be higher.
Q: What is the 3-year period for?
A: Typically, a 3-year period is what most Distributor/Networks will ask for, and it depends on the Licensing Term of the Distribution/Network contract. This is something you should consult with an entertainment attorney with to make sure you fully understand the contract you are signing.
Q: How can I prevent E&O claims?
A: Unfortunately, there is really nothing you can do to “prevent” an E&O claim, because anyone can file a lawsuit/claim against your production for any reason, whether it’s valid or not. The only thing you can do is obtain proper E&O Insurance to protect yourself from lawsuits/claims.
Q: How can I lower the cost of my E&O?
A: The most common way to lower the cost of E&O Insurance is to increase the deductible amount. Keep in mind that if a claim/lawsuit occurs, you are responsible for the deductible. Another way is to lower the Term of Coverage from 3 years to 1 year. However, most E&O Insurance Carriers typically offer the same premium amount for a 1-year and 3-year policy term for a Single Project E&O Insurance Policy.
Q: Does every Project need E&O insurance?
A: No, not every project needs an E&O liability insurance policy. Sometimes, International Distribution/Network companies do not require it. However; without E&O Insurance, you will NOT have any insurance protection against claims/lawsuits for unauthorized use of anything seen or heard in your project.
Giovanni Cuarez is our lead Film Production Insurance Executive. He has been in the entertainment and insurance industries for the past 20 years. If you are looking for an E&O liability insurance policy or have more questions, call him at 800-555-4177.