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statement of qualifications and quality assurance and quality control manual for ins. policy?

Discussion in 'Starting a Business, Incorporation' started by riffwraith, Sep 22, 2021.

  1. riffwraith

    riffwraith Law Topic Starter New Member

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    Hi :)

    Some time back, I registered a bus name with the state of CT. It's a SPLLC; I have no partners, no officers, no employees. I haven't done anything with it yet (no losses/no gains), but am about to. I am in the process of trying to get an E&O policy, which would be for the composition and licensing of original music. This is proving to be a bit of a challenge.

    I have been asked for a copy of the contract I will use, a statement of qualifications and a quality assurance & quality control manual.

    The contract, not a problem. But the other two? I did some research on statement of q, and it appears to be for an applicant's qualifications and experience in job-related areas. But I am not applying for anything here; I own the bus.

    The latter seems to be for managing, performing and verifying work affecting QC. Why does the ins co. want this? What specifically are they looking for here?

    Thanks in advance for any insight.
     
  2. adjusterjack

    adjusterjack Super Moderator

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    The insurance company underwriters want what they want in order to write you a policy. They aren't giving you (or me) any reasons nor do they have to.

    Insurance companies can be reluctant to write one man start-ups because that's often where the losses outweigh the premium collected.

    On the plus side, there are many insurance companies that write E&O insurance so you are free to check out other sources.

    Are there trade associations for your type of business? Trade associations often have hassle free E&O insurance available for their members. Check that out.

    Are you working with an independent agent or are you just seeking coverage online?
     
  3. Tax Counsel

    Tax Counsel Well-Known Member

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    You are applying for insurance and the insurer wants to know that you actually know something about the business you are getting into.

    They want to know that you have, and will follow, good practices in this kind of business.

    It's all about reducing the risk they are taking in insuring you.
     
  4. riffwraith

    riffwraith Law Topic Starter New Member

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    Got it.

    But what specifically do I give them? Do I just type a line that says, I am qualified to compose and license music b/c I have been doing it for 12 yrs - ?

    And how do I tell them that I will follow good practices in my business? Do I say that I will follow the law, and will not lie, cheat and steal?
     
  5. Tax Counsel

    Tax Counsel Well-Known Member

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    I suspect that won't be good enough to satisfy the insurer. Provide details — exactly what all have you done in the business the last 12 years? And provide details of the procedures you plan to use in conducting the business, especially as it related to managing intellectual property rights of others, copies of the contract templates you plan to use, how you'll manage other risks of that business, etc. I mean, you have thought that out, right? If you haven't, you should. Those are important to running the business smoothly. Talk to the insurer to ask what it wants to see. It's the insurer you need to satisfy, after all.
     
  6. riffwraith

    riffwraith Law Topic Starter New Member

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    Thanks again.

    details of the procedures you plan to use in conducting the business - that's just composing and licensing music, and sending the music to various potential clients. Not much there.

    managing intellectual property rights of others - no such thing here.

    copies of the contract templates you plan to use, - I have one contract that covers everything I do - I already sent that to them.

    how you'll manage other risks of that business - the only risk I have is spending some money on a recording session and not being able to license that set of musical cues. There really is no other risk.

    Have asked the broker for more clarification.

    Cheers.
     
  7. PayrollHRGuy

    PayrollHRGuy Well-Known Member

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    I'm not seeing why you think you need E&O coverage. If the only risk is that you have mentioned above that isn't likely an insurable risk.
     
  8. riffwraith

    riffwraith Law Topic Starter New Member

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    Oh right - wasn't thinking straight before :/

    The risk is getting sued for plagiarism. Unintentional, of course; I would never intentionally steal anyone else's work. Then, you have the bogus suits, like Lady Gaga's 'Judas'. THAT is really what I am looking to protect myself against.
     
  9. adjusterjack

    adjusterjack Super Moderator

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    There is an implication that he might be doing this for others.

    If just for himself (his own works) there may be a need for copyright/trademark infringement insurance. Yes, it's a thing.

    insurance for copyright or trademark infringement at DuckDuckGo

    Riffwraith, think about that potential exposure, too.
     
  10. PayrollHRGuy

    PayrollHRGuy Well-Known Member

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  11. riffwraith

    riffwraith Law Topic Starter New Member

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    Thanks.

    So, to be clear. I am:

    1) Composing original music
    2) Even tho copyright is gained as soon as the work is created, I need to register the works with the CR office, which I do
    3) Recording that music (at a studio, with musicians)
    4) Sending that music out to potential clients, in the hopes that licenses are obtained
    5) Fielding phone calls/emails from clients about requests to license the music
    6) Sending out contracts to clients to be signed
    7) Sending out the appropriate audio files (music) to clients
    8) Registering the work with my PRO, for collection of royalties down the road
    9) Collecting payments from clients for license fees

    My concern is that someone who hears the music (it will be in the PD), will think that there is a plagiarism lawsuit, and launches litigation against my LLC. I am seeking insurance should this happen. I was already quoted on this, and was not asked to provide what is being requested this time.

    I could give the above to the insurance co, but this is more of a 'business plan' than either of what they asked for.

    I am waiting to hear back from the agent.
     

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