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Errors & Omissions Insurance Coverage – scam?
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[Richard Kuenneke] “I guess it’s worth the peace of mind – but it alters the landscape for the super local, like me.”
No, it keeps your landscape from being altered.
Anybody working in any kind of media that deals with facts, especially if self-employed, NEEDS E&O insurance for the work you create. That means a small amount of money to INSURE that you’re not spending the rest of your life paying for one small mistake.
Even if all you’re doing is commercials for furniture stores and used car dealers, you still need general liability insurance to protect you from anything like, say, a customer in the store tripping over your tripod and breaking their arm when they fall. The store won’t pay that claim. Their insurance company will make sure that it all falls on you.
You better pray that customer has health insurance, because you can bet that they’ll find a lawyer to make sure you pay. (In most states, lawyers can ONLY get paid for liability cases when they win, which gives them a lot of incentive.) You could even find yourself on the hook for their lost income.
That’s a physical thing – but the work you do is far more than physical. Even local commercials carry images, ideas and facts — not just yours and your clients, but anything related to any company you deal with. E&O is what INSURES that any mistakes – even those made in good faith, with the client’s support and direction – don’t fall on you.
This kind of thing is the same reason electricians, carpenters, masons, mechanics, doctors, lawyers, landscapers and other craftspeople carry INSURANCE – to protect THEM from any mistakes they make when they’re working for you. To INSURE their landscape from being altered, perhaps to the point of never being able to practice their trade again.
It’s the same reason you INSURE your house, apartment, car – to INSURE that your landscape never becomes altered beyond your ability to recover.
Without insurance, you can never INSURE that you have a financial future for yourself and your family. You insure your life so that you INSURE that your family has at least a year or two to stay afloat.
(Not married yet? Perfect time to start a life insurance policy. The premiums for the rest of your life will be much lower too.)
You may not want to play in the big leagues. Doesn’t matter. If you want to be an adult in this business, you need the appropriate insurance. Adding E&O to a general liability policy costs a few dollars. It’s your responsibility to take care of yourself, your business and your family.
Tim Wilson
Creative Cow Magazine!My Blog: “Is this thing on? Oh it’s on!”
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I’m the guy who said $50 and yes, that’s my reality. For reasons.
My E&O policy is good coverage. It’s also based on the fact that my business insurance package has been in force for more than 20 years. In that time, I’ve had very close to ZERO claims.
So yes, I’m probably paying a lot less than current competitive rates in some areas of my policy.
In point of fact, I never asked for E&O coverage. My agent offered it during a review back in the 1990s as my practice was growing.
If I ever find myself ASKING for additional coverage in that area or any other, I fully expect the insurance company to see this as a red flag and do their best to sell me coverage at SUBSTANTIALLY higher rates. THIS IS HOW INSURANCE WORKS.
40 years ago, I had brain surgery. The $40,000 in medical bills were paid for (after a HUGE hassle) by a $125 a YEAR policy I was added onto by my wife when she was a College student. Why so low? Because most college students are at VERY low risk for major surgery.
Similar with business insurance. If you don’t really need it, you can get it cheap. Once ANYTHING establishes that you’re at risk for a claim, your costs will SKYROCKET for the same protection that someone else can secure for pennies. It’s just how the industry works.
And something we all have to deal with.
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I have general liability insurance. I don’t have E & O, which you say I need just as much as I need general coverage. Where do you buy yours?
Why aren’t the insurance companies advertising in the trades? And if this topic is so important, why aren’t we seeing more articles about it? Shouldn’t the Cow or some other trade report on this topic?
Given the critical need for this insurance – according to you and a few others in this string – It appears the insurers are missing the boat by not making themselves known.
Rich
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[Anybody working in any kind of media that deals with facts, especially if self-employed, NEEDS E&O insurance for the work you create.]
Just wanted to add that E&O insurance is generally required by distributors on feature films projects, as well. While you definitely want to get E&O for documentary, it’s equally necessary for film and TV.
– If you create a fictional character that ends up with similarities to an actual person, place or event, that’s where E&O insurance covers you.
– If you accidentally film a car’s license plate and neglect to fuzz it out, that person can say you’ve invaded their privacy.
– If you include a piece of artwork in the background that you didn’t get permission to photograph, its owner has a claim against you.
– If your title violates someone else’s trademark, the cost of a suit could be staggering.There are a TON of reasons to get E&O coverage and anyone working on professional scale projects simply must get it. If you’re doing straight-to-the-web stuff or very small scale stuff that’s unlikely to make any money, it may not be a big deal. But as soon as you start selling your work, I would consider it mandatory.
What I think this thread has overlooked is that within the film industry E&O covers everything you SHOULD have obtained permission to use but accidentally DIDN’T.
So to answer the Subject of this thread — No, it’s not a scam. It’s absolutely essential for film and TV professionals.
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I don’t wish to add undue levity to a serious subject but am I the only one here who finds it paradoxical that an historical documentary producer who thinks WW2 started in 1941 should be arguing whether he needs insurance against errors of fact in his work?
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Uh – you’re wrong. September 1, 1939 in Europe when Germany invaded Poland. https://en.wikipedia.org/wiki/World_war_two
The United States entered the war in 1941 after the Japanese attack on Pearl Harbor. That was my reference, sir.
Rich
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Thank you for this note and your laser focused response as to why this insurance is necessary – very helpful.
I know all the cable shows fuzz out faces and license plates – but to me that’s done to avoid a frivolous hassle from someone with a lawyer who is looking for a quick buck. I’ll bet those cable show attorneys tell the producers to fuzz everyone and everything with an identifiable feature even though that video is legal because it’s shot in a public right of way. If gaining permission of every person on the street was mandatory, then each and every television news operation would fold over night – or all of its video would have to have a blur filter applied before being used.
Interesting.
Rich
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[Richard Kuenneke] “I know all the cable shows fuzz out faces and license plates – but to me that’s done to avoid a frivolous hassle from someone with a lawyer who is looking for a quick buck”
Take a look at the Best Practices guide linked above. There are ways that you can use crowd shots, background art, license plates, etc. — and ways that you absolutely can NOT.
Copyrights, personal stuff – that’s bad. Maybe very bad. Trademark violation? Fall afoul of somebody big, and they’ll own you. The courts can hold you responsible for the value of the trademark to the trademark holder TIMES THREE.
That sounds dire, but as mentioned above, it’s the same reason that every trade practitioner takes out insurance, and why many venues require it of you — any mistake is going to fall down on YOUR head. Your client pays their lawyers good money to make sure of it.
Pro or not, small-time or big-time, as soon as your work steps out into public, the size of the error is all that matters. So the question to ask yourself isn’t, “Is a few dollars a day more than I feel like paying for insurance?” The question is, “How much can I afford to lose?”
I guarantee that your first loss will be bigger than what you’ve spent on insurance.
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Thanks for the laugh at my expense.
My reference – off the cuff – was made in reference to United States involvement – but you probably knew that or maybe not?
Remember Pearl Harbor!
Rich
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