Errors & Omissions (“E&O”) Insurance
by Talia Huculak
A number of insurance options exist to help protect against unforeseen costs that may arise when producing a film or television show. One particularly important example is Errors and Omissions (“E&O”) insurance.
E&O insurance policies protect producers, distributors, festivals, and even networks that have been sued by a third party due to an inadvertent act, including:
- The unauthorized use of intellectual property;
- The unauthorized use of names, products, businesses and/or likeness;
- Libel and slander;
- Defamation of character;
- Invasion of privacy; and
If an E&O policy holder is sued for one of these (amongst other) errors, their insurer will cover the costs of defending the lawsuit as well as any ensuing damage award ordered by the court.
What Isn’t Covered by an E&O Insurance Policy?
Taking out one of these policies doesn’t guarantee protection against any and every lawsuit. There are important limits to be mindful of.
Firstly, E&O insurance policies only cover mistakes (i.e. negligent acts). Intentional wrongdoings on the part of the policyholder or related third party will not be covered by E&O insurance. For example, a producer that purposefully or knowingly used copyrighted material without permission or exception in their television show would not be protected by their E&O policy for any resulting lawsuit. In fact, one of the first steps to obtaining an E&O policy is to provide a prospective insurer with proof that all necessary clearances and permissions related to your production have been accounted for. Most E&O insurers won’t supply coverage without this proof.
Second, E&O insurance coverage will only apply for a limited time period, known as the “policy term.” Generally, a given policy will cover either any claim that’s come in during the policy term, or a claim at any point for an event that’s occurred during the policy term.
Finally, an E&O insurance policy will also limit the total amount it will pay out to a policyholder. Generally, the insurance policy will limit how much will be covered for an individual claim, as well as the total amount that will be covered for all claims taken together over the course of the policy period.
For these reasons, it is important to carefully read the details of a given E&O insurance agreement to get a better sense of what will and what won’t be covered by the policy. Any specific limits will be provided in writing by the insurer.
E&O insurance policies are a common feature of entertainment productions today. In fact, many distributors and financiers won’t sign onto a project without one, making obtaining one of these policies a critical first step in greenlighting your work.