When examining diamonds, the ‘Four C’s’ method is used. A diamonds value, rarity and beauty are determined by Colour, Clarity, Carat and Cut. It’s a way of distinguishing why two diamonds that may look the same are valued differently.
A similar approach using four c’s is employed by underwriters when examining firms facing media liability risks, namely Content, Control, Clearance and Claims.
- Content is king. This is basic common sense and is simply a focus on the activities – what content does the organisation produce and for whom does it produce it? What will their client use their content for and is there exposure to higher hazard areas or contentious material?
- Clearance is vital for media risks. What are their review procedures? Do they have in house editorial and expertise in media/entertainment issues? Is there a process for referring to outside counsel? How do they vet 3rd party content? What is the copyright procedure?
- Control – what processes are in place for unsolicited submissions, content take-down, retractions and corrections? Do they review and monitor licensing agreements and request hold harmless agreements from 3rd parties? If they broadcast live, do they incorporate a delay device?
- Claims can happen – but what is their record like? Is there a frequency of small claims due to inadequate controls, or something more serious due to a flaw in the clearance procedures? Frequent claims can indicate poor risk management or a litigious client base. Claims can also come from preventable wrongful acts, so steps can be taken to prevent similar situations from reoccurring?
Just like identifying the quality of a diamond, the Four C’s is a great method for determining the potential exposures of media organisations. Experienced underwriters have the knowledge to identify any potential shortcomings in a seemingly straightforward risk and, equally as importantly, spot the diamond in the rough.