| To protect oneself from potential liability, the multimedia producer should consider purchasing Errors and Omissions (E & O) insurance. Errors and Omissions insurance will protect the insured from negligence that gives rise to claims of defamation, invasion of privacy or publicity, copyright and trademark infringement and breach of contract arising from submission of materials to the producer.
Recently, American International Group (AIG), a large insurer, announced that it would offer Patent Infringement Liability Insurance. The insurance includes coverage of expenses and damages, including attorney fees, incurred to defend any lawsuit alleging infringement of a United States patent. However, the minimum premium is fifty thousand dollars and the minimum deductible is fifty thousand dollars. The insured also has to pay ten percent of all damages and defense costs, and any punitive damages that may be awarded.
Insurance will not protect the insured from acts of intentional wrongdoing such as deliberate infringement or fraud. Therefore, the producer should be prepared to show that he was acting in good faith. He should maintain records of releases and correspondence to secure rights, and copies of letters from counsel in regard to what licenses are necessary.
Insurers will typically require an applicant for insurance to secure all necessary licenses and permissions. Also, a copyright report and title report will be needed, and all employment agreements must be in writing. If music is going to be used, synchronization and performance licenses will be necessary.
If the multimedia script is original, its origins must be determined to ensure that everything in it is original and none of it has been copied from another work without permission. The insurer will then carefully review the project before issuing a policy.
Errors and Omissions insurance will pay for any liability incurred, as well as defense costs. The deductible is often ten thousand dollars or more.
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