By Mark Frieser
Do you know the expression “Road to Damascus moment?” I’m asking because after reading this article I hope many of you will have a Road to Damascus moment that’s going to change your life for the better. I know I did.
Before I get into why I’m saying this, for those of you that never heard this expression, it means a point in life where a great change in your way of doing things, your beliefs or your ideas occur.
The expression is based on the story in the New Testament about how the apostle Paul was converted to Christianity while he was on the road from Jerusalem to Damascus on a mission to persecute Christians.
And, while I’m not going to say you’ll have such a momentous conversion as Paul’s, I am going to talk about something today that is extremely important to almost anyone who wants to get any type of music into any type of media, and is essential for anyone wanting to work with an ad agency or brand.
That something is Errors and Omissions insurance.
Errors and Omissions insurance, or E&O insurance, is a type of insurance that protects the people and companies that have it (and their clients) from the potential consequences of being sued for copyright infringement, misrepresentations of rights assignment or ownership, general music-production and creation wrongful acts and other errors and omissions made in the creation and representation of music for usage in advertising, brand campaigns and other forms of media.
Let’s make no mistake – you can still get sued – and lose – if you have E&O insurance, especially if you willingly infringe on someone else’s copyright, but E&O is a significant shield everyone should have at their disposal.
I’m sure you’re beginning to think to yourself if you didn’t know about E&O insurance “wow, that sounds like something really important to have, why didn’t I ever hear of this before?”
The good news is, you’re not alone – my very reason for writing this article is because yesterday I sent out an email to about 40 well-placed people in various positions in sync and composition asking them if they knew good E&O insurance agencies, and only about 15% knew what I was talking about.
This was a group that includes music supervisors, producers, people at ad agencies and other people I thought would know someone I could speak to about E&O insurance, let alone know what E&O is at all.
That little factoid blew my mind – most ad agencies won’t even let you do business with them if you don’t have E&O insurance – so I thought everyone I knew would have at least a passing knowledge of E&O.
But amazingly they didn’t. And to be fair, E&O insurance isn’t as important in TV, film or other media outside brands and ads (I would argue otherwise, but that’ll be the subject of a future post), but still, most didn’t know what it was, across the board.
And if 85% of this group of seasoned professionals I contacted didn’t know what I was talking about, how many people that aren’t deeply involved in music licensing and scoring for media and ads as their primary work know what E&O insurance is, let alone know why it’s important?
That’s why I’m writing this. Because people in sync and composition for ads, brands and any form of media need to know what E&O insurance is, they need to know why it is important, and if they need it, they need to know how to get it.
So far, I’ve told you what E&O Insurance is and a little bit about why it’s important. Now, I’ll tell you more specifically why it’s essential to many doing business music licensing and composition.
Ad firms won’t do business with you if you don’t have E&O. Most ad firms and many brands (their clients) require the music providers they work with have E&O insurance. Why? In a word, risk.
Brands and agencies take on a great deal of risk when in releasing an ad: image, audience, sales, millions-to-billions of dollars in budget, and they don’t want to be tripped up by the errors or mistakes an artist or rights owner may make when providing music for a campaign.
Having E&O insurance gives ad agencies and their clients the level of confidence they need to work with you so that if things go wrong, they’re protected from the cost of lawsuits, additional production time/cost and other issues resulting from a mistake or infringement on your part.
It protects you from copyright infringement suits for sampling: Let’s say someone licenses or gets a custom track from a creator or rights owner.
In that track, there’s a sample, which the owner/maker fails to mention. In the rush of post-production, the music is used, then after the fact, someone hears the sample of their song in a commercial. What happens next is that the rights owner will not only sue you, but the agency and brand for copyright infringement. That ruins you, makes the agency look bad (and potentially payout a lot of money and lose a client) and costs the brand money.
Everyone loses. Mostly you.
With E&O insurance, in the case there’s a sample that slips by everyone, there may still be a legal action, but the insurance acts as a shield to you, your company, your client and their client. It limits liability and protects the people you work with from further potential action.
Of course, you really should know what samples you have in your music if you do have them – still, E&O protects you if you make this error.
It protects you from copyright infringement cases based on people claiming usage of derivative IP: Let’s say you license or create a track for a project. There’s some sounds/melodies/rhythms/lyrics or anything else that sounds derivative, i.e., they sound like another song – and the writer of the original work decides to sue you.
Without E&O, you, your client and their clients and partners are all potentially suable and liable if there was a court case, and depending on the outcome, everyone is burned – you’re ruined, the agency loses a client and the brand looks bad.
With E&O, you’re not only indemnified, you have a partner in a court case with a shared interest in winning. You can still get sued, but it will limit your liability.
Insurance firms, like anyone, don’t like to lose cases, and if it’s a frivolous claim against you, there’s a better chance you’ll win with an ally, and if you lose, your insurance will keep you, the agency and brand from losing money.
Fewer lawsuits in the first place. Having E&O insurance will keep a lot of frivolous/baseless lawsuits from happening because when people see you have E&O insurance, they’ll be less likely to want to go against you and an insurance company that’s going to aggressively defend its interests.
Your Legal fees in these cases are paid. Those costs alone, if they come up, are far more expensive than having E&O insurance.
If there is a claim you were negligent or your work was inadequate, you’re covered. Let’s face it, disputes happen – we try not to let them, but they do. If you have E&O insurance, you’re at least covered if you have a dispute with a client or their client. That’s a big deal.
I think at this point, you can see how E&O insurance is not only essential if you want to do business in advertising, but an important component of any business working in music and media.
The downside is that it’s not cheap. A basic policy is in the $10K per year range. Still, it’s money well spent if you have it.
And if you don’t have the money to get E&O insurance yourself, align yourself with a production house, sync agency or other company that has E&O insurance.
Just ask if a sync agency or other company you’re going to work with has E&O before you go work with them.
Now, if you do want to get E&O insurance, I’m going to suggest you get in touch with a great insurance agent named Geoffery Eix. He’s worked with some of the best in the business and will be happy to talk to you and see how he can assist you. Here’s his info:
Phone: +1 760 202 7711
Just tell him I sent you. It’s definitely worth a call.
And remember, CYA with E&O – you probably won’t work with ads and brands if you don’t.