What could insurance have possible to do with film producers and directors? The answer: everything. Why? Because no movie or television show could ever be made without an insurance policy in place.
It all started in the 1920s when film production officially became a vice and a burgeoning business in Hollywood. The first entertainment insurance policies in Hollywood were written to protect film equipment, pretty much like how car insurance is written to protect your pocket when a car accident happens. Now, entertainment insurance policies are written to protect film and television projects from practically all risks, like damage to film equipment and property.
Film insurance coverage has been expanded too to protect film producers and directors. Insurance for film producers and directors have less to do with the loss of life or limb, it has more to do with protecting them against liabilities arising from lawsuits. Underwriters know this type of insurance by its more ubiquitous initials – E&O insurance or Errors & Omissions insurance.
Producers and directors need E&O insurance for different types of risks. They may not know it, but the title of a movie production project might be violating a trademark by a third party and hence could be subject to lawsuits arising from copyright infringement. On the other hand, failure to obtain consent or a license could invite a lawsuit or multiple lawsuits. As you may know, within the litigious United States of America, the cost of defending oneself against lawsuits could be staggering.
On an expanded note, an E&O insurance policy protects producers and directors from liabilities arising from lawsuits that allege:
- Defamation, libel, and slander
- Intellectual copyright infringement
- Unauthorized use or misappropriation of format, characters or ideas
- Breach of confidence
- Infringement of privacy rights
E&O insurance is not just limited to the bigwigs, they are also for any producer and director from a small independent production house.
