Dan, I know you are right, but what a downer!
I looked up an article on all of this by using Google, and read it.
This is obviously just a racket that exists because lawyers, like sharks, look for any opportunity to attack and devour. The problem is that virtually none of the potential cases would have any real basis to justify a lawsuit. But everyone runs in fear of lawsuits, and that means that everyone feels compelled to get insurance and to make sure that nothing, no matter how trivial or lacking in legal basis, will interfere with getting the insurance.
Consider The People vs Larry Flynt
. Did the producers really get a release from Jerry Falwell for the portrayal of him in that film? Hard to believe. I guess Falwell qualified as a "public person". But how about less prominent people in a real or quasi-real story? And how about characters who are partially based on minor figures (almost totally unknown to the general public, hence not really public), and how about composite characters based on other minor players in some real-life drama?
All of this is ridiculous. And, according to the article that I read, the sticking point is distribution. The distributors want the film to have the insurance.
In any case, I find all of this very discouraging. Thanks a lot, Dan!