Unlike comprehensive general liability policies, media liability policies cover claims of copyright and trademark infringement, invasion of privacy, defamation and other contextual errors and omissions. Some policies even cover claims of misappropriation of ideas, as well as a number of other media perils. Most of these policies also cover the costs of defending a lawsuit, including attorney's fees and court costs.
What Should I Look for in a Media Perils Policy?
Insurance policies vary widely. It is important to emphasize your comprehensive general liability policy almost never protects you against the types of claims discussed in this article. However, if you are sued, or threatened with a lawsuit, your attorney should consult your policy to ascertain the scope of protection - if any - offered. Keep in mind as well, that if your publisher is sued, the indemnity clause in your publishing agreement will make you responsible for legal defense costs, as well as for any settlement or damage award.
In the following section we discuss what questions you need to ask when shopping for a media perils insurance policy.
1. Does the Policy Cover Attorneys' Fees?
Determine if the policy provides coverage for legal fees and defense costs, as well as payment of damages. Some policies have defense costs within the limit of liability, while others offer defense costs in addition to the limit of liability. Defense costs outside the limits of the policy provide broader coverage. Other policies require you to obtain approval before incurring any attorneys' fee or expenses. It's also important to determine whether the policy requires the insurance company to defend a lawsuit against you. If it does, you can save a tremendous amount of money in legal fees. A secondary concern is whether the policy will allow you to choose your own defense counsel.
2. Does the Policy Cover Punitive Damages?
Another key point to investigate is whether the insurance policy covers punitive or exemplary damage awards. Some states, such as New York, do not permit insurance companies to insure you against punitive damages. Because an award of punitive damages may be substantial (sometimes even more than actual damages and attorneys' fees), where permissible, you should make sure that your insurance policy will cover any punitive or exemplary damage award.
3. Does the Policy Require a Lawyer's Opinion?
Many insurers will not issue a media risks policy unless the publisher, or author, provides an opinion letter from a publishing attorney analyzing the risks of a lawsuit. While the cost of hiring a publishing lawyer to vet your manuscript can be significant, it is another form of insurance in and of itself. However, it is a cost that should also be taken into account when comparing policies and their rates.
While more common when insuring a film production, some policies will not insure the title of a work unless they receive a lawyer's title report. While titles are not protected by copyright law, some may fall under the rubric of trademark law, especially titles that evoke an established brand, thus, creating a likelihood of confusion as to source or association with that brand. Therefore, the cost of obtaining a title report should should be taken into consideration when shopping for coverage.
4. What Types of Claims Are Covered?
It is important to speak with an insurance broker familiar with this type of coverage to find out exactly which types of claims are covered and which are not. For example, some policies cover claims of intentional infliction of emotional distress or misappropriation of ideas, while others do not. Other insurance policies offer optional coverage, for an additional fee, for claims for bodily injury or property damage resulting from negligent advice or instructions.
All writers and publishers should obtain a policy that covers, at a minimum, claims of libel (written defamation) slander (spoken defamation), invasion of privacy, violation of the right of publicity, copyright infringement, trademark infringement and unfair competition. Obviously, the more types of claims covered, the better the policy. Many insurance policies exclude certain claims, such as those alleging intentional or malicious acts, from coverage. It is important to find out what types of claims are excluded, as you will bear the cost of defending excluded claims yourself.
5. Which Versions of the Work Are Covered?
You should investigate whether the insurance policy will cover more than one version of your work. If your work will be published in hardcover, paperback, traditional eBook and multimedia form, make sure the insurance policy covers all of those versions. Additionally, find out whether the policy covers condensed versions, serializations, audiobook and other versions of your work. Similarly, you should find out if coverage extends to book jackets, flap copy, press releases, advertising and promotional materials (including catalog copy and companion blog), interviews and personal appearances.
6. Where Is the Policy Effective?
It may seem like a simple question, but many policyholders fail to ask whether their policy covers claims outside the United States. Most insurance policies cover claims only brought in the US. If your work is going to be distributed outside of the United States, you'd better make sure that your insurance policy will cover claims and lawsuits brought in any country where your work is sold, or translated.
7. Is the Policy a "Claims Made" or "Occurrence" Policy?
There are two types of insurance policies: "claims made" policies and "occurrence" policies. An occurrence policy offers broader coverage. A "claims made" policy covers claims made during the policy period, whether or not the actual activity which gives rise to the claim occurred before the policy came into effect. An "occurrence" policy covers material published during the policy period. If your policy is a "claims made" policy, and a lawsuit or claim is brought the day after your policy expires, the insurance policy will not cover the claim even though the acts giving rise to the claim occurred while your policy was in effect. Alternatively, with an occurrence policy, it doesn't matter when the claim is made. As a rule, you should avoid "claims made" policies.
8. Settlement
As an author or publisher your freedom of speech or press rights are protected under the First Amendment of the United States Constitution, as well under most state constitutions. Therefore, it's important to ask the broker if the policy gives you input into the selection of a qualified First Amendment or media defense counsel.
Insurance Policy Prices
The premiums for media insurance policies vary depending a number of factors, including the amount or limit of protection you elect. The premiums generally take into consideration several additional factors, including:
Whether you consulted a qualified publishing attorney. Most insurers allow rate card credits to authors and publishers who have their manuscripts reviewed by an experienced publishing attorney.
The type of book. For example, the premium for a science-fiction novel will be less than that for an investigative report, unauthorized biography, or roman a clef, which might result in a lawsuit for defamation or invasion of privacy.
Whether releases and permission forms have been secured, and if their scope cover all the uses, versions and editions of the work during the term and throughout the territory in which the work will be exploited.
Whether you've cleared the title of the book.
Whether any claims have been threatened.
The amount of coverage sought and the deductible. As coverage goes up, so do the premiums, but as deductibles go up, premiums go down.
The writer's experience and reputation.
If you are a publisher, the adequacy of the author or other contributor's contractual representations and warranties as to originality of content and factual accuracy of information.
The use of appropriate disclaimers.
The revenues you expect to derive from the sale of your work.
If you are an author, you can ask your publisher to name you as an additional insured under their media perils policy, if they carry one. However, don't be lulled into a false sense of security, as these policies often have very high deductibles, which are used to lower the publisher's insurance costs.
If there is already a claim made against a book, an insurance company may refuse to insure you, or exclude the preexisting claim. For this reason, think twice about publishing all or part of the book online, or in a magazine or newspaper before the official book is published.
INSURANCE CHECKLIST
While not an exhaustive list, here is a checklist of points to raise with the broker when shopping for a media perils policy:
What types of claims are covered?
What is the period of coverage?
What is the deductible and the limits of coverage for each claim?
Are legal fees and defense costs covered separately or in addition to the maximum policy coverage?
What are the conditions for coverage, i.e., is prepublication review and an opinion letter by an attorney required?
Who is covered (publisher, author, or both)?
Is there an additional charge or fee for naming an author as an "additional insured" party?
Are lawsuits outside the United States covered?
Is the policy a "claims made" policy or an "occurrence" policy?
Does it cover translations or other editions of the work (e.g., mass market paperback, trade paperback, eBook versions, etc.)?
Are punitive damages covered?
Do you have the right to have your own attorney represent you or does the insurance company require their attorney?
Can the insurance company settle a case without your approval or do you have the right to approve settlements?
Resources
DISCLAIMER: This article discusses general legal issues of interest and is not designed to give any specific legal advice pertaining to any specific circumstances. It is important that professional legal advice be obtained before acting upon any of the information contained in this article.
LLOYD J. JASSIN is a New York-based publishing attorney and entertainment lawyer in private practice. He is co-author of the bestselling Copyright Permission & Libel Handbook (John Wiley & Sons). Contact: Law Offices of Lloyd J. Jassin, The Paramount Bldg, FL 12, 1501 Broadway, New York, NY 10036, Tel: (212) 354-4442, email: jassin@copylaw.com. Follow him on Tweeter: https://twitter.com/lloydjassin
STEVEN C. SCHECHTER is a media and entertainment law attorney based in Paramus, NJ, and co-author of The Copyright Permission & Libel Handbook (John Wiley & Sons). Contact: Law Offices of Steven C. Schechter, 36 Farview Ter, Paramus, NJ 07652, Tel: (201) 880-9818, email: schechter@medialawyer.tv
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