Show Posts
1
Getty Images Letter Forum / Cyber Liability Insurance
« on: July 13, 2011, 10:26:21 PM »
Just got off the phone with our corporate attorney. He was aware of the Getty situation. He is also a very long time family friend. We are insurance people in the entertainment industry. 75% of our business is property and casualty, 25% is errors and omissions, which is where copyright infringement issues are covered by an insurance policy.
His first reaction was "yea, isn't that brilliant, I wish I had a piece of that action". As I explained all that I learned from this forum, he would basically agree with all the advice I was regurgitating. He seemed bored with it all. He's going to draft a letter of representation for me. He's been the attorney for us, and the previous owner of our firm, for 25+ years.
Our final thread of conversation was interesting. As of late, a new insurance product has been evolving in the slow moving world of insurance products. For the last 300 years, the most common insurance policy for a plain old small business was the General Liability policy, it covers you against claims of bodily injury or harm caused by you to others in your employ in the course of conducting your business. Most small business buy a BOP, (Business Owners Policy), typically an inexpensive policy combining general liability and property coverage.
Because prior to the Internet, copyright infringement wasn't a common exposure for small business, it is excluded for most common GL policies. When we insure a movie or TV show, the producer must buy a specialized Errors and Omissions policy to be covered for copyright infringement.
Starting in about 2000, insurance carriers started to notice the increase in copyright infringement claims from clients that they didn't expect, due to the Internet. If the client had only GL coverage, tough cookies, it wasn't covered. But producers and distributors starting getting hit with claims due to the Internet and they submitted claims under their E&O policies.
About 4 years ago, carriers started to develop a new form of general liability that included coverages formerly only available under a separate E&O policy, sometimes this new hybrid coverage is called Cyber Liability. In most policy forms we've read, copyright infringement is covered, the insurance carrier will pay you defense costs plus any judgements.
But in order to obtain this coverage, you'll have to answer a question on the application along the lines of "Have you obtained the rights to all the images on your website?". If you ever submit a claim after obtaining a policy, and you can't prove that you obtained the rights", your claim will be denied. But, if you did make a good faith effort to obtain the rights, and a supplier or web site developer lied to you, you ARE covered!
Unfortunately, you also have to disclose if you've received a Getty demand letter, and they may either result in you being declined by the carrier, or be charged a larger premium than someone who hasn't gotten a letter. Insurance companies won't likely consider anecdotal evidence that a letter has a low probability of ever resulting in a law suit. insurance policy premium is determined by actuarial calculations, and the data they'd need isn't available.
If you haven't received a letter, and have cleaned up your site WRT copyrighted images, a Cyber Liability policy may be the way to go. The biggest selling factor for Cyber liability right now is if you conduct business using credit cards, but I think this Getty business makes a great secondary reason to consider this insurance insurance. Last I looked, the minimum premiums were in the 500 dollar range.
His first reaction was "yea, isn't that brilliant, I wish I had a piece of that action". As I explained all that I learned from this forum, he would basically agree with all the advice I was regurgitating. He seemed bored with it all. He's going to draft a letter of representation for me. He's been the attorney for us, and the previous owner of our firm, for 25+ years.
Our final thread of conversation was interesting. As of late, a new insurance product has been evolving in the slow moving world of insurance products. For the last 300 years, the most common insurance policy for a plain old small business was the General Liability policy, it covers you against claims of bodily injury or harm caused by you to others in your employ in the course of conducting your business. Most small business buy a BOP, (Business Owners Policy), typically an inexpensive policy combining general liability and property coverage.
Because prior to the Internet, copyright infringement wasn't a common exposure for small business, it is excluded for most common GL policies. When we insure a movie or TV show, the producer must buy a specialized Errors and Omissions policy to be covered for copyright infringement.
Starting in about 2000, insurance carriers started to notice the increase in copyright infringement claims from clients that they didn't expect, due to the Internet. If the client had only GL coverage, tough cookies, it wasn't covered. But producers and distributors starting getting hit with claims due to the Internet and they submitted claims under their E&O policies.
About 4 years ago, carriers started to develop a new form of general liability that included coverages formerly only available under a separate E&O policy, sometimes this new hybrid coverage is called Cyber Liability. In most policy forms we've read, copyright infringement is covered, the insurance carrier will pay you defense costs plus any judgements.
But in order to obtain this coverage, you'll have to answer a question on the application along the lines of "Have you obtained the rights to all the images on your website?". If you ever submit a claim after obtaining a policy, and you can't prove that you obtained the rights", your claim will be denied. But, if you did make a good faith effort to obtain the rights, and a supplier or web site developer lied to you, you ARE covered!
Unfortunately, you also have to disclose if you've received a Getty demand letter, and they may either result in you being declined by the carrier, or be charged a larger premium than someone who hasn't gotten a letter. Insurance companies won't likely consider anecdotal evidence that a letter has a low probability of ever resulting in a law suit. insurance policy premium is determined by actuarial calculations, and the data they'd need isn't available.
If you haven't received a letter, and have cleaned up your site WRT copyrighted images, a Cyber Liability policy may be the way to go. The biggest selling factor for Cyber liability right now is if you conduct business using credit cards, but I think this Getty business makes a great secondary reason to consider this insurance insurance. Last I looked, the minimum premiums were in the 500 dollar range.
). Either way, I'm in the business of insuring movies and television shows, we sell E&O polices for production companies all day, every day, and I'm well aware of copywrite issues. I've paid for about 60% of the images on our site, the rest I made sure were clearly identified and 'Free - NO royalty', or clearly in the public domain.