All audio/visual production involves a number of specific risks and unforeseen difficulties that may occur during pre-production, production or even years after the release of an A/V Product.

Production risks include: the loss or death of key personnel to the production (stars and/or the director); loss or damage to equipment/property essential to the production; loss or damage to the medium upon which A/V Product has been recorded; loss or damage to the master recording of the production; and damage to third parties or their property during the production process. Insurance can be purchased to protect the producer and investors against such losses.

Another type of risk may occur at any stage of the production whether during development or far into the period of exploitation and this is the risk associated with the ownership or control of the intellectual property upon which the audio/visual product is based. Such insurance is referred to as errors and omissions insurance (E&O).

E&O insurance, in general, covers the following errors or omission made by the producer in publishing the audio/visual product: allegations of defamation made in the audio/visual production; allegations of invasion of privacy incorporated into the production; allegations of copyright infringement incorporated into the A/V product; allegations of infringement of right of publicity; and allegations of unfair competition (passing off).

Many producers mistakenly believe that E&O insurance covers any error or omission that the producer might make. E&O insurance, like any insurance policy is subject to its terms, and requires close examination as to what is or is not covered. In general, disputes between the production employees, partners, contractors and parties related to the production are not covered; nor are contract related claims covered. E&O is intended to cover damages (and the court costs of defending any claim of damage) that the producer may have caused to third parties in those areas of coverage noted above.

Obtaining E&O insurance generally requires the producer to complete an application form of 6-10 pages long. The application includes an overview of the clearance procedures that the insurance company expects the production company lawyer to follow. It should be noted that the insurance company generally does not want its lawyer reviewing contracts, chain of title documents, scripts etc. Instead the insurance company lawyer will discuss the production with the producer’s lawyer and rely on that individual’s honesty and truthfulness in discuss any issues and how they are being handled. It is therefore important that the application be reviewed by the production lawyer before being submitted. This also allows the production lawyer to better understand any production issues and to be prepared to deal with them before they become real problems.

For assistance in navigating an E&O application or to discuss specific clearance issues, call me at 416 466-1487 or send me an email at: mkrys@filmlegals.com.