Back to Basics: Production E&O insurance in the UK film industry
For anyone involved in producing film or television content for distribution or broadcast, Errors and Omissions insurance — universally known in the industry as E&O — is not optional. It is a commercial and practical necessity.
What is E&O insurance?
E&O insurance is a specialist form of liability insurance that protects a production company, and typically the other principal parties to the production and distribution of the content, against claims arising from alleged intellectual property infringement, defamation, invasion of privacy, and related wrongs connected with the content of the production. In the context of a film or television programme, E&O cover can respond to, for example, claims that the production infringes a third party's copyright in underlying source material, that it infringes a registered trade mark, that it contains defamatory content about a real individual, or that it misappropriates a person's name or likeness without appropriate consent.
E&O insurance is characteristically a 'claims-made' policy; that is, it provides cover for claims made against the insured during the policy period, rather than for events occurring during that period. This distinction has important practical consequences: it affects when cover must be in place, and for how long. Given that claims may arise long after a film's initial release, a well-structured E&O policy should provide cover for an appropriate period once the production is in distribution.
Why is E&O insurance required?
Virtually all distribution agreements, broadcasting agreements, and financing arrangements in the UK and internationally will require the production company to maintain E&O insurance as a condition of the deal. Broadcasters and streaming platforms will typically insist on sight of a valid E&O certificate before a programme is transmitted or made available. Distributors will similarly require E&O cover before undertaking any sales activity on the production's behalf. In short, without E&O insurance, a film or television programme will, in practice, be unsaleable and unexploitable in most commercial markets.
The prerequisites for E&O insurance
Because E&O insurers are providing cover against claims arising from the content of the production, they require extensive documentation before issuing a policy. The production company must demonstrate that the necessary steps have been taken to identify and manage the risk of third-party claims. In practice, this documentation will typically include (amongst other things):
A comprehensive chain of title, i.e. the full documentation establishing the legal ownership of all rights in the production from the original underlying material through to the production company itself, including all assignment and option/purchase agreements relating to underlying rights, and agreements with key creative personnel.
A title report, prepared by specialist entertainment lawyers, setting out the results of rights searches and due diligence on the production's title, and typically providing a reasoned legal opinion on the state of the rights.
A script clearance report, in which potentially problematic elements of the script, including references to real persons, businesses, products, or events, are identified and assessed for legal risk.
Music clearance documentation, including all synchronisation licences and master use licences for any pre-existing music used in the production.
Releases and consents, including signed consent forms from all individuals who appear on screen, location release forms, and any other clearances required in connection with third-party content included in the production.
The insurer's willingness to issue a policy, and the premium charged, will depend on the quality and completeness of this documentation. Productions with significant gaps in their chain of title, or which have failed to obtain necessary clearances, will encounter material difficulties in obtaining E&O cover, or may face policy exclusions and significantly elevated premiums.
Practical considerations
It is strongly advisable (and is the practice of well-run productions) to address E&O requirements from the earliest stages of production, not as an afterthought at the delivery stage. Clearance issues identified early are invariably less complicated and less costly to resolve than those left until the point at which distribution deals are being finalised. Securing E&O insurance is closely intertwined with the chain of title work that should accompany any production throughout its life, and specialist entertainment lawyers play an important role in both..
Finally…
So, Creators and producers — do not leave E&O insurance to the last minute. It sits at the intersection of chain of title, rights clearance, and commercial viability. Get the foundations right early, and involve specialist entertainment lawyers in the process from the outset.
DISCLAIMER: Please note that this content is for informational purposes only; it does not constitute, and should not be construed as constituting, legal advice. Whilst care is taken to ensure the content is accurate at the time it was produced, it may no longer be. You should seek specific legal advice in respect of particular legal issues or concerns. No liability or responsibility is accepted in respect of the content, or any actions taken based on the content.
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