If a media or content policy is the communications industry’s version of an errors and omissions policy, does that E&O policy actually cover errors and omissions? Not necessarily.
In one sense it depends on your definition of “errors and omissions.” All policies we’re aware of that are designed to provide content liability coverage for media companies cover certain torts – like defamation, invasion of privacy and copyright infringement.
But sometimes media policies don’t cover other mistakes that a communications company can make, mistakes that would ordinarily be covered by other E&O policies by the catchall of “negligence” in performing insured services.
For example, a newspaper’s business section may write a story about a company, and the story inaccurately portrays the company’s financial position and prospects as being better than they actually are. Suppose someone invests on the basis of that bad information, loses money and sues the newspaper for negligence in its reporting.
Setting aside the defenses the newspaper might have to such a lawsuit, that kind of claim would not be covered by insurance if the policy didn’t extend coverage beyond defamation, privacy, copyright and some other specified torts into the generalized area of negligence.
In the world of media insurance that coverage for general negligence in insured content may be called something like “content E&O,” “contextual E&O,” or “contingent E&O.”
Some companies build that type of coverage into their base forms; others, including some key players, don’t. In that situation a producer must ask for the coverage to find out if the insurer will offer it.
The next layer of possible E&O coverage is more difficult to obtain. It’s for bodily injury and property damage claims stemming from negligence in content. A classic example involves coverage for the publisher of a school chemistry textbook. The text contains the wrong formula for a lab experiment, and students are injured as a result of an explosion or the reaction of volatile chemicals. Another example is someone who is injured while using an exercise video.
For such a claim to be covered, the policy would need to have content or contextual E&O that extends to bodily injury and/or property damage arising from errors in content. The normal bi/pd exclusion on the policy would have to be modified.
Because companies issuing media policies (and many other types of E&O policies) are reluctant to cover bodily injury or property damage, that coverage may not be obtainable, depending on the insurer and the risk characteristics of the specific account.
Each of the situations discussed so far involve negligence or some other tort in content, whether that content is found in a newspaper, a video, a broadcast or in some other medium. But media companies sometimes need E&O coverage for associated services, as opposed to content. They may provide a service, perform it negligently and generate a claim. For example, an advertising agency may neglect to place an advertisement, and that may ruin a client’s promotional campaign. It’s a garden variety E&O, but it didn’t arise in content. It was a failure in service.
Such a problem can arise in other areas as well, and some media insurers don’t do a very good job insuring this kind of exposure. Others do better, and that’s another factor that must be considered for some insureds.