Is it Common for a Distributor to Pay for a Film’s Errors and Omissions Insurance Policy?
If you’re an independent filmmaker that is about to distribute your first film you might be surprised when a distributor requests that you carry errors and omissions insurance in order to move forward with a distribution deal. You might be even more surprised when you find out how much errors and omissions insurance costs. And that your distributor wants you to name them as the Additional Insured before the deal will move forward. Errors and omissions insurance is almost always a requirement by film distributors. But is it common for a distributor to pay for a film’s errors and omissions insurance policy?
What is Errors and Omissions Insurance?
Errors and Omissions Insurance (E&O Insurance) provides coverage for producer’s or those named as “additional insured”.
In the event they bring forth a legal claim. Be it in regards to copyright infringement, privacy infringement, defamation or slander, trademark infringement, plagiarism, piracy, or breach of contract.
While E&O Insurance is incredibly valuable and offers coverage including payment for judgement costs if the producer is found responsible in any of the previously listed cases.
It can also be rather costly which is why many independent filmmakers wonder, “Is it common for a distributor to pay for a film’s errors and omissions insurance policy?”
Who Pays for the E&O Insurance?
In most cases, E&O Insurance is secured by the producer to cover themselves through the course of production.
But when the project shifts stages and nears distribution it is very common for the distributor to request that they be add as an “Additional Insured” to an existing insurance policy.
In effect, the distributor will likely require that the producer hold E&O Insurance as part of the distribution deal and they are almost certainly NOT going to pick up the bill.
The Expectation
So, is it common for a distributor to pay for a film’s errors and omissions insurance policy? Not really! Typically, the distributor will expect that the producer will secure, and pay for, errors and omissions insurance coverage.
And that they include the distributor on the policy. Not only does E&O Insurance potentially cost thousands of dollars. It can take several weeks for a policy to process.
So it’s important for the independent filmmaker to know that they should be prepared for this expense, and timeframe, in advance as it could otherwise hold up a distribution deal.
What Happens If I Don’t Have E&O Insurance for my Film?
As we navigate the question, “Is it common for a distributor to pay for a film’s errors and omissions insurance policy?” You’re probably wondering what happens if you don’t have E&O insurance for your film?
The answer – it won’t be distributed in North America! Every film distributor in North America requires E&O insurance before a film is distributed. Therefore, if you’re an independent filmmaker that’s new to the process.
And now you have a distributor that is requiring you to have errors and omissions insurance for your production. Which also names the distributor as the additional insured. If that’s the case, you’re going to have to carry the policy. And you’re going to have to pay for it too!
