Professional Liability Risks for the Entertainment Industry

Today almost every production company, film distribution firm, or any business in the entertainment industry can find itself facing a liability lawsuit. A Professional Liability lawsuit can put assets at risk including business assets, resources, and in some cases the personal assets of owners. One simple mistake could cause financial devastation, as well as end a professional career. Some businesses mistakenly fail to realize that they have an exposure to professional loss.

Professional Liability Insurance is sometimes called Errors and Omissions (E&O) coverage. Claims come from errors or omissions in the performance of professional services. Companies that perform production services have an exposure to E & O claims. E & O insurance also protects against alleged libel, slander, defamation of character and invasion of privacy. This coverage will usually be required by a distributor prior to release of any theatrical or television production.

Often claims result from overlooking a critical piece of information, misstating a fact, misunderstandings, forgetting to do something, using copyrighted material or misplacing something. In today’s world, the definition of “standard of care” has broadened through court cases and statute changes. Professional Liability Insurance provides the entertainment industry with protection against potential legal action by clients and other third-parties.

Here are a few actual claim examples:

• A post production firm used images without a license as part of the opening to the film. The owners of the images filed a lawsuit for copyright infringement. The case was settled for $12,000.

• United Talent Agency filed in Los Angeles a breach of contract and fraud lawsuit against World of Wonder Productions over the packaging of the hit Oxygen TV series, Tori & Dean: Home Sweet Hollywood. The agency accused the producer of “deceitful accounting” and underpaying profits to UTA, then refusing to let UTA have full access to its books or records as part of a “blatant attempt” to cover up its accounting practices. http://www.deadline.com/

• Kevin Costner filed a lawsuit against the production company Morgan Creek. The lawsuit alleged it was the production company’s duty to disclose "truthful, accurate, full and complete" revenue information from the film, but it failed to do so. The case was dismissed.  The production company’s insurance paid for the defense of the lawsuit.  http://www.upi.com/

It is never too late to get a quote, so call John Hart today.