Liability protection

[Tim Bisley]

Would a general permission/liability release form be enough to protection or should one look into insurance and an LLC? For big productions I know they need to have copious amounts of coverage, but for a youtube short, is it needed?

[Tripp Woelfel]

Geez... that's a hard one because there are so many variables and personal considerations that enter into that decision. You definitely want a good permission/liability agreement so that someone cannot come back later and try to blame you for global warming and the common cold. Insurance is another deal altogether. How much you want is dependent upon how risk-averse you are. I tend to be a minimalist when it comes to insurance, but then I'm pretty careful and a bit conservative. That comes from being old, I guess.

A lot of that decision depends upon the environment you're going to shoot in. If you're shooting flower in a park you'll need a lot less legal protection than if you're shooting construction on the 35th floor of an unfinished skyscraper.

This decision will be hard for someone else to make since you need to carefully consider all of the risks present in your shooting situation, and not just the obvious ones. It's the weirdo ones that can come out of the weeds that can really bite you on the bottom. You might want to chat this one up with others on your crew familiar with the situation.

In the end, there's merit in the old saw, "it's better to be safe than sorry."

[Steve House]

Originally Posted by Tim Bisley

Would a general permission/liability release form be enough to protection or should one look into insurance and an LLC? For big productions I know they need to have copious amounts of coverage, but for a youtube short, is it needed?

The scale of the production isn't the issue, it's the risk itself. If a light stand fell over during your shoot and injured someone or started a fire, could you cover the expenses out of your pocket? Where you were planning to show the video after it was completed has nothing to do with it. Some locations and corporate clients may require you to show proof of insurance before they'll let you onto the property at all. Unless you're working strictly by yourself as a one-man band, some jurisdictions might require you to carry Workmen's Comp insurance coverage for your talent and crew as well. It's my understanding that while an LLC might shield your personal assets from the business's creditors, it does nothing to protect you against liability for accidents or negligence.

[Shaun Roemich]

Originally Posted by Steve House

It's my understanding that while an LLC might shield your personal assets from the business's creditors, it does nothing to protect you against liability for accidents or negligence.

Further, my accountant has specifically advised me AGAINST forming an LLC as most contracts one would be required to sign for rentals, purchase etc. now as an added clause cause the contract signer to be held PERSONALLY responsible for any loss. Just a HAIR off topic here, but I think the debunking of the myth of the "all encompassing protection" of an LLC has value in this discussion.

[Jim Andrada]

Large companies I've done consulting work for (not video related, though) have typically required a business liability insurance policy of at least $1 Million before I could work on their premises or on the premsies of their customers. And they needed to see a copy of the policy before I could start work.

The only equipment I was using was a notebook PC and a paper notebook and a pencil.

[Shaun Roemich]

Jim: it's the pencil they're worried about...

[Jim Andrada]

Actually, I think they were more worried about me than about the pencil!

[Paul Tauger]

Originally Posted by Tim Bisley

Would a general permission/liability release form be enough to protection or should one look into insurance and an LLC? For big productions I know they need to have copious amounts of coverage, but for a youtube short, is it needed?

A liability release is a defense to a lawsuit -- it won't prevent one. Also, it is generally not possible to release acts defined as gross-negligence.

Insurance provides indemnification, both against loss and the costs associated with defending a law suit. For the small business owner, law suit defense, even of a non-meritorious suit, could be financially disastrous.

An LLC (if properly administered) ensures that you will not be held personally liable for any liability incurred by the LLC, i.e. if your LLC gets sued and loses, your personal assets (house, car, etc.) are protected. Note, however, than an LLC is not a magic wand. You must "respect the corporate formalities" for the shield to be effective. This means that you can not mix personal and corporate funds, (generally) use your gear or company truck for personal use, etc. Often, a law suit will name both the LLC and its principal as defendants. The plaintiff will do everything in his power to "pierce the corporate veil" and find a basis for reaching the principal's personal assets in a judgment.

Hope this helps.

[Paul Tauger]

Originally Posted by Steve House

The scale of the production isn't the issue, it's the risk itself. If a light stand fell over during your shoot and injured someone or started a fire, could you cover the expenses out of your pocket? Where you were planning to show the video after it was completed has nothing to do with it. Some locations and corporate clients may require you to show proof of insurance before they'll let you onto the property at all. Unless you're working strictly by yourself as a one-man band, some jurisdictions might require you to carry Workmen's Comp insurance coverage for your talent and crew as well. It's my understanding that while an LLC might shield your personal assets from the business's creditors, it does nothing to protect you against liability for accidents or negligence.

Some excellent advice, but just one correction: if the corporate formalities of the LLC are observed, it will act as a complete shield for personal liability, provided the acts complained of are within the course and scope of your employment. For example, if you have a truck owned by your LLC, get drunk and run over someone, both you and the LLC will be liable. If, however, you don't adequately tape down cables resulting in the aforementioned light stand crashing, i.e. simple negligence, you would normally not be personally liable.