The Clearance Report a Distributor Will Ask For

What the report actually is

There is no single form called the clearance report. When a distributor asks for one, what they mean is the set of documents an errors and omissions underwriter will read before a policy is bound, because without that policy the deal does not close. We have not found a standard format for a clearance log in any source we trust, so we build ours as a file, not a template: one folder, one index, every third-party element traceable to a paper.

Why a distributor asks for it

E&O insurance is a requirement for distribution deals with studios, networks, DVD distributors and internet sites. It covers claims such as copyright infringement, defamation and right of publicity, and it pays the legal costs. The distributor wants a certificate of insurance because a claim after release can name them too.

The standard limits in that guide are $1,000,000 per claim and $3,000,000 aggregate, with a deductible around $10,000. The guide adds that the distributor's agreement sets the actual terms. A broker's FAQ says larger platforms often ask for $1 million per claim and $5 million aggregate or more, with the distributor named as additional insured. That's a broker's page, so treat the figures as a starting point and read your own deal memo. The IDA guide dates from 2012, and limits move.

What the package contains

The underwriter wants proof that someone looked at every element before the picture went out. The two sources agree on the list:

• Chain of title for any underlying material, plus written agreements with everyone who supplied it. Every option, assignment and work-for-hire agreement is kept.
• Script clearance: a search of character names, business names, organizations, phone numbers and addresses. The broker's page says recommended changes have to be made before the policy is bound.
• A title report, because a title cannot be copyrighted but a similar one can still cause a dispute.
• Defamation review by an entertainment attorney for anything contentious.

The same broker page claims incomplete clearance is the most common reason applications are declined or restricted. We can't verify that claim. It does match what the paperwork implies, though. Gaps get noticed.

Releases, locations and chain of title

Written releases for recognizable living people are the backbone. The guide says they should let the producer edit, modify and re-sequence the material, which is the wording to check before a release goes out. Location agreements and talent paperwork sit beside them. We collect most of this early; the releases we get before the camera turns on are the ones we can still get cheaply. A release chased after picture lock costs more, in time and in leverage.

Archival footage and music

Clips and photographs need licenses and consents from the copyright owner and sometimes from the people shown. Music is where files get thin. A single cue may need a sync license, a master use license and a performance license, and a missing one can stall a policy. The same pressure is why archive licensing has become the hard line item in a documentary budget.

Timing matters. The IDA guide notes that most application questions can be answered before filming ends, while the music and title reports usually arrive in post-production. So the file is finished late, after the cut has settled, and the cut's music has to be settled first.

Fair use: the letter and the disclosure

If a sequence relies on fair use, the guide says to get a fair use opinion letter from an experienced clearance attorney. The broker's page adds that reliance must be disclosed at application, and that an undisclosed determination that later ends in litigation may affect coverage. The letter is an opinion. It is not a license, and a rights holder can still sue; what the policy does is help pay for the defense. Tell your broker about every fair use sequence, and don't let the underwriter find one in the screener.

What we'd do with it

According to the guide the process takes at least three to five days, and longer when clearance issues or missing music licenses come up, so we don't schedule the application the week before a delivery date. Build the index while you cut, and keep the finished file with the masters; what we keep after delivery now includes it. For us, the film is only delivered when the music's paperwork closes alongside the mix.