Other Provisions
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Other Provisions

Portfolio

The portfolio clause is one of the most important clauses for an Agency. In the absence of a portfolio clause, an Agency is generally limited to saying that it worked on a Client project (unless a confidentiality agreement is in place) but it cannot use any images of the work. Thus, the Agency should address portfolio rights proactively to ensure it has the rights it needs.

While a portfolio clause can take many forms, the key elements an Agency is looking for in a portfolio clause include:

  • what Client information Agency can use (e.g., name, logo)
  • What information about the work Agency can use (e.g., an anonymized description of the work, images of the work itself, rejected concepts)
  • How the portfolio can be used (e.g., web, print, social channels, submissions for awards or recognition).

Note that you do not need to retain the copyright in your work to use it in your portfolio. You only need written permission from the Client. Effectively, a license from your Client.

A thorough and Agency favorable portfolio clause might read something like this:

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Portfolio. After Client has released Agency’s work to the public, Agency may use Client’s name, links to Client’s website, a description of the work, and images of the work (including unused concepts) (i) in Agency’s portfolio (written and electronic) to promote and demonstrate its work, (ii) in media publications, (iii) in Agency’s social channels, and (iv) in submissions to competitions for purposes of pursuing awards of recognition. Agency may use its work in these ways without additional compensation to Client.

Some notes about a portfolio clause:

  • Only After Public Release. This almost goes without saying, but only use work after it has been released to the public. It is reasonable for Client to ask that this restriction be made explicit in the portfolio clause as in the example above.
  • Include Concepts. In branding work, it is common to develop a few different logo variants and have the client choose one. If you want to be able to use the concepts that were not selected, call that out specifically. A Client can be understandably sensitive about publishing branding that isn’t “official.” If you want to use rejected concepts, you might consider dealing with this on an as-needed basis.
  • Try to Avoid Consent. Ideally, the Agency’s portfolio use won’t be subject to the Client’s prior consent. The reason is that consent can be withheld (sometimes for reasons unrelated to the work) and can be time consuming to obtain. That said, it reasonable for a Client to ask that an Agency obtain consent to portfolio use. If the Client asks for a consent right, see if you can get your typical portfolio use (e.g., website) excepted so the consent right only applies to additional uses (e.g., submission to a magazine for award or recognition). Alternatively, ask that the Client not unreasonably withhold its consent.
  • Describe Work Accurately. It is fair for the Client to require that portfolio use accurately describe the Agency’s role in the project.
  • Be Specific. Don’t simply say that “portfolio use” is permitted. Think about the specific uses that are needed and describe them with specificity. For example, you may want to display work on your website and other digital media (e.g., reel), you may want to use print samples, or you may want the right to display the work on your social channels, in competitions, at festivals or shows, or in displays around your office. Describe all the uses you need.
  • Consider Third Party Content. Remember that if a portfolio piece has embedded third party content (e.g., music, stock photography), you may need additional licenses to use that third-party content in your portfolio since the original licensed use was for Client’s project.
  • Dealing with Silence. Where a contract is silent on portfolio use, you might choose to proceed on the theory of “ask for forgiveness, not permission.” While a client is probably on solid ground to ask that you take down any portfolio pieces, in most instances, it is unlikely to snowball into a larger liability. Simply taking down the portfolio piece typically addresses the client’s concerns.
  • Coordinate with Confidentiality Obligations. Be mindful of any confidentiality agreements you may have signed at another stage of the project. Make sure the confidentiality clause doesn’t inadvertently restrict your desired portfolio use. If there is a confidentiality agreement in place, address with language like the following:
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Portfolio. As an exception to the Confidentiality Agreement dated [date] between Client and Agency, after Client has released Agency’s work to the public, Agency may use ...

Keep these tips in mind to get your Agency and your Client on the same page about portfolio use of the work.

Insurance

Creative agencies probably want to have insurance. Not only will it help you sleep at night, but it is often required by Clients. The amount and types of insurance depends on the project size, types of work, Agency size, and other factors.

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This section outlines the typical issues with insurance clauses in Agency Agreements.

  • Understand What Insurance You Have. Most Service Agreements require a standard set of insurance and coverage. Not every Agency has all the coverages in all the amounts specified. An Agency’s first response to an insurance clause is to confirm whether it has coverage in the amounts and types specified. If you don’t know, send the language to your insurance broker and ask that person. Once you have the information, build a simple document summarizing the policies and coverage amounts your Agency has (and then keep it up to date). It’ll make dealing with insurance clauses easy.
  • Be Wary of Standard Language. If the insurance your Agency has is different than what is specified in the agreement, edit this clause to reflect the insurance you do have. Often the Client will accept your changes. If the Client doesn’t accept the changes, then ask what specifically about the project creates a risk requiring the insurance in question. For example, if the standard agreement requires $5,000,000 in coverage and you are doing a $50,000 project, ask whether the excess coverage is necessary or if it is a vestige of a standard form.
  • Additional Insured. It is common for an insurance provision to contain a requirement that the Agency name the Client as an additional insured on the CGL policy (and possibly certain others). This is a reasonable request of your Client. An additional insured designation ensures that insurance proceeds paid in connection with a Client project actually go to the Client. This is generally a free endorsement you can obtain by contacting your broker and providing the additional insured information specified by your Client.
  • Proof of Coverage. Some Clients will require that you provide proof of coverage before work can begin (or at least on request). Both the additional insured requirement and the proof of coverage requirement are reasonable requests from the Client. Despite language requiring proof of insurance, Clients often don’t ask for this info. No worries. One less thing for you to do (but be ready to provide it when requested).
  • Consider Typical Coverage. Listed below are the typical types of insurance and coverages that Clients may require in their Service Agreement. Once your Agency gets to a certain level, these coverages can be table stakes for working with certain clients. Even if your Clients aren’t asking for this insurance, having certain basic insurance is just good business.
    • commercial general liability ($1 million per occurrence / $2 million in aggregate);
    • automobile liability ($1 million per occurrence)
    • workers’ compensation (statutory limits)
    • professional liability with appropriate intellectual property infringement riders) ($1 million to $5 million or more, depending on size and nature of project)
  • Additional Coverage. Specialty work and more sophisticated clients may ask that its Agencies carry some additional types of insurance. As your Agency grows, consider these extra coverages:
    • umbrella liability ($1 million to $5 million)
    • multi-media / intellectual property / advertising ($1 million to $5 million)
    • employer’s liability ($1 million per claim)
    • event liability ($1 million to $5 million)
  • Infringement Insurance. Professional liability insurance with intellectual property riders can be the most critical type of insurance. For designers, this insurance can help protect you if someone on your team uses content or software without proper licensing (copyright infringement) or if a brand you design is may infringe an existing brand (trademark infringement). For developers, this insurance can help protect against liability where code replicates an existing invention (patent infringement). This category of insurance, especially patent infringement protection, can be the most expensive insurance. So, if you are unable to push the risks of these types of problems onto your Client (as discussed elsewhere in this book), having the right insurance can be critical.
  • Alternative Clauses. Sometimes the Service Agreement will simply contain clause obligating the Agency to obtain appropriate insurance:
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Agency will maintain insurance appropriate for the size and scope of work performed by Agency under this Agreement at its expense.

This is certainly easier to negotiate and can be a good response to a Client Service Agreement that contains detailed insurance provisions. If the Service Agreement you are facing is silent on insurance, don’t feel obligated to add an insurance provision. But an Agency should still consider whether carrying insurance is an appropriate business decision.

Despite the technicality of most Service Agreement insurance provisions, clauses like this are often a compliance matter rather than a complex negotiation. Keep these points in mind when dealing with the next insurance provision you face.

Conclusion

For many Agencies, portfolio rights are of tremendous importance. Despite this, I’m surprised how many Agencies I encounter simply assume they have full portfolio rights. Avoid that unexpected cease and desist letter and address portfolio issues head on.

Just like your contract is an important piece of risk management, so is your insurance. As your Agency grows, or as you take on different types of work, you’ll want to revisit the coverage you carry. If you don’t have certain insurance that your Client’s form of Service Agreement is asking for, just address it head and ask that it be removed or scaled appropriately.

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