I've been reading the posts here regarding insurance and there is a lot of good advice. I have a question about an issue that I didn't see described here with the same details, so I would like to ask for some advice.
I have a question about business insurance. My husband and I have formed an LLC (Colorado) for video production and multimedia. We have been offered a contract to create training videos for a corporation near Philadelphia. They are to provide the scripts, storyboards, and voiceovers. We will create the videos in our studio (in the basement of our home). No one else will be working there.
They started out offering us contracts as contractors, which I believe would have gone through their HR office, but we asked them if we could be paid through our LLC instead. They had a legal/accounting person send us a contract for "Consulting Services, Training and Development Support Services," with one of the items being a requirement that we have Comprehensive General Liability ($1,000,000 each occurrance) and Professional Liability -- Errors and Omissions ($1,000,000), naming their company as an additional insured under both policies.
My husband (a student) talked with one of his professors who has worked in the industry for years, and he asked several others in the field, and they've said that is not a common requirement for a video contract. The professor recommended we ask that it be waived.
Do you have any experience with this situation? From the posts I've read, it seems like a good idea to get the General Liability insurance, but maybe not the E&O, especially if they provide the scripts, storyboards, and audio? What about the request to list the company as an insured on our policies?
If we do need to get those policies, any recommendations for an insurance company?
My State Farm agent has said they would cover the General Liability but not the Errors and Omissions.
Any advice would be welcome!
We just did a large government job and they were asking for E & O. After some research, we determined that E&O insurance covers the transfer of "rights" of intellectual property. Anyone selling a movie or a video for distribution needs to have E&O. the insurance premium is usually based on the amount of the transaction. We would have had to buy insurance based on our annual income which was substantially higher than the one single job. It seems that if we were writing the scripts, we needed it. If not, we didn't need it. We weren't, so we didn't. Got it?
Our information came from "Media Law for Producers" written by Philip H. Miller, Focal Press $40, ISBN 978-0-240-80478-1
Buy it. read it. Embrace it.
It's a dry heat!
Sony HDCAM F-900 & HDW-2000/1 deck
5 Final Cut (not quite PRO) systems
Sony HVR-M25 HDV deck
2-Sony EX-1 HD .
I have two clients that require vendors be incorporated some how (i.e., LLC, inc., etc.) and have general liability insurance. If the vendor does not meet these two “have to haves” they are not accepted as vendors. I think this is pretty common with “larger companies.”
I do not have an Errors & Omissions policy. From what my agent told me, it didn’t cover what I wanted it to cover, and seemed like it was too much money for what little it did cover. For instance, if I subcontract 5,000 replicated DVDs or CD-ROMs, sign off on “artwork with typos” or “a content master that didn’t work” my agent told me that E&O would not cover the re-doing them. The reason he told me is that the bad ROMs did not hurt the client’s income or reputation, thus such “screw ups” do not fall within the O&E policy coverage.
In my opinion, all video related companies that are “in charge” on location sets should have general liability insurance. Especially since I find that many TBA videographers do not carry it. I pay about $40 per month for $1 million General Liability insurance with a Marine clause that covers “video related stuff.”
My insurance provider is ACUITY: https://www4.acuity.com/acuityweb/home
Bennett Marketing & Media Production, LLC
If you can find a business insurance company who reps The Hartford insurance, I know they also provide policies specifically for video production companies. I had to cancel State Farm with my company because the video production specific policies were a bit beyond what they offered.
I still have my car and home with State Farm however!