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Question: What is an E & O Insurance policy, and why is this important
in a screenplay contract negotiation?—FLASCREENWRITER
Answer: E & O, or Errors and Omissions, Insurance is akin to a malpractice
policy for writers and filmmakers. It protects them should they inadvertently
infringe another party's copyright, defame a person, invade someone privacy
etc. etc. It does not cover a writer or filmmaker if they knowingly engage
in wrongful behavior. In other words, if they are careless and infringe another's
rights they are covered, but if they intentionally plagiarize a script, they
would not be covered by insurance.
The insurance policy covers the named insured, and you can add additional
named insureds to the policy for a nominal charge. If you are a member of
the Writer's Guild of America, then by virtue of their collective bargaining
agreement, the writer is supposed to be included on the employer's policy.
Even with E & O coverage, in the event of litigation the insured may
be liable for the deductible, which can be $10,000 or more.
The policy covers both any damages assessed against the writer/filmmaker,
and the legal fees incurred for defense.
E & O is often required by U.S. distributors before they will license
a film for distribution. They want to right to distribute the film, and do
not want to buy a lawsuit.
A writer and filmmaker can be liable for copyright infringement even if they
don't intend to infringe another's copyrighted material. For instance, if
a filmmaker licensed a piece of music for his film, and it turned out that
unbeknownst to the filmmaker the musician that sold him the music didn't
own all the necessary rights to it, then the filmmaker could be liable even
though the filmmaker was an innocent infringer.
—Mark Litwak (www.marklitwak.com)
Mark Litwak is a veteran entertainment attorney and Producer’s Rep
based in Beverly Hills, California. He is the author of six books including:
Reel Power: The Struggle for Influence and Success in the New Hollywood,
Dealmaking in the Film and Television Industry, Contracts for the Film and
Television Industry, and the recently published Risky Business: Financing
and Distributing Independent Film. He is the author of the CD-ROM program
Movie Magic Contracts, and the creator of the Entertainment Law Resources
website at www.marklitwak.com. He can be reached at law@marklitwak.com.
Disclaimer-Any
material sent to or provided by Mark Litwak is for illustrative and educational
purposes only and should not be relied upon as legal advice, or be considered
confidential or the basis of an attorney client relationship. This
material may not be suitable for your particular situation and different
legal advice may be appropriate depending on your jurisdiction or circumstances.
Therefore, you should not rely on this material, or any part of it, without
the advice of competent legal counsel.
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