Crafty Table: Why E&O Insurance Is Your Responsibility — Not Your Distributor’s

One of the most common misconceptions among indie filmmakers is that the distributor is supposed to “cover” Errors & Omissions insurance.

That is not how this works.

You made the movie, which means you are the one who needs to make sure the product is legally clean, properly cleared, and safe to release. Distributors are not in the business of assuming unknown legal risk for somebody else’s film.

Even when a distributor says they have a blanket E&O policy, filmmakers often misunderstand what that means. In most cases, that policy is there to protect the distributor, not you.

What Is E&O Insurance?

Errors & Omissions insurance, usually called E&O, is a specialized insurance policy designed to protect against legal claims arising from the content of a film or television project.

Typical claims covered by E&O policies can include copyright infringement, trademark infringement, defamation, libel, invasion of privacy, misappropriation of likeness, unauthorized use of music, artwork, footage, logos, or brands, failure to properly secure life rights or chain of title, claims involving underlying rights, claims that a story or character was stolen, and clearance issues involving real people or businesses.

In short, E&O is there to protect against somebody coming out of the woodwork after release and claiming that your movie infringed on their rights. If that happens, the lawsuit can become very expensive very quickly.

Why Filmmakers Are Responsible

This is where a lot of filmmakers get confused.

The filmmaker created the film. The filmmaker hired the cast and crew. The filmmaker chose the music, artwork, locations, logos, archival footage, and script. The filmmaker is the party responsible for obtaining releases, clearances, licenses, chain of title documents, and legal opinions.

That means the filmmaker is also the party best positioned to secure E&O coverage.

From a distributor’s perspective, it makes no sense to assume legal risk on a film they did not make. If a producer used unlicensed music, forgot to clear artwork hanging on a wall, based a character too heavily on a real person, or failed to secure life rights, why should the distributor be the one holding the bag?

They should not.

That is why most distribution agreements require the filmmaker or licensor to deliver proof of E&O coverage as part of the delivery package. In many agreements, failing to provide E&O can delay delivery, delay release, or even give the distributor the right to terminate the agreement.

The Blanket Policy Myth

A lot of filmmakers get excited when a distributor says something like, “Don’t worry, we have a blanket E&O policy.” That sounds great until you realize what it usually means.

Most distributor blanket policies are designed to protect the distributor entity itself, its affiliates, employees, officers, and distribution activities. That does not necessarily mean you, the filmmaker, are protected.

In fact, many blanket policies do not extend meaningful protection to the producer at all unless the filmmaker is specifically named as an additional insured. Even then, the distributor may still have the right to seek indemnification back from the filmmaker if the claim arises from something the filmmaker failed to clear properly.

So if your distributor’s E&O policy steps in to defend the distributor against a claim involving your film, that does not necessarily mean you are protected from the same claim. You could still be sued directly, still have to hire your own lawyer, and still be exposed.

That is why relying solely on a distributor’s blanket policy is dangerous.

Why E&O Is More Important Than Ever

E&O has always been important, but it is becoming even more important as the industry changes.

More films are being made faster. More filmmakers are relying on internet research, found footage, memes, social media content, AI-generated material, and public domain assumptions that are not always accurate.

At the same time, distributors, streamers, broadcasters, and platforms are becoming more cautious because they do not want legal headaches.

Some E&O carriers are also starting to look more closely at the use of AI in the filmmaking process. If producers are using AI-generated scripts, images, music, voices, or likenesses without fully understanding the legal implications, insurers may either charge more, impose exclusions, or refuse to cover certain claims entirely.

That means filmmakers who cut corners on clearances today may find themselves uninsurable tomorrow.

What Filmmakers Should Do

Filmmakers should treat E&O as a core production cost, not an afterthought.

That means budgeting for E&O early, keeping organized chain of title records, securing all music licenses and artwork clearances, getting appearance releases, location releases, and life rights when necessary, and having an attorney review underlying rights issues.

Filmmakers should also make sure their E&O policy specifically covers the film and names the appropriate parties, understand exactly what is excluded from the policy, and ask whether AI-related claims are covered.

The cheapest time to solve a clearance issue is before the movie is released. Once the film is in the marketplace, problems become exponentially more expensive.

Final Thought

A distributor can help you release your movie. A distributor can help you market your movie. A distributor can help you monetize your movie.

But a distributor should not be expected to absorb legal risk that you created.

If you made the movie, it is your responsibility to make sure it is legally clean. Because if a claim shows up after release, you do not want to be the filmmaker learning for the first time that your distributor’s blanket E&O policy was never really protecting you in the first place.