Truthfully, when I read the “hey, we’re now offering liability insurance” email, I wondered what, exactly, that entails.
According to their website, there are three main types
NOTE: I am not a lawyer, nor am I offering professional or legal advice. The following are just my observations and conclusions as a fellow freelance designer.
Please seek legal advice or contact The Freelancer’s Union directly for more information.
Finally, I am not an advocate for The Freelancer’s Union nor am I receiving any money to blog about their products and services.
Types of Insurance
Of the three, professional liability insurance is probably the most applicable to our profession. This type of insurance, also known as errors and omissions insurance, covers things like:
- Claims of negligence
- Awarded damages and defense costs
- Claims of libel and/or slander arising from your work
- Punitive damages
- Claims arising from subcontracting
So what does that really mean?
Well, let’s say you’re working on a project where you’re comparing your client’s product to “other national brands.” You choose an orange laundry soap bottle (no markings) and Tide slaps you with a libel case.
Or, perhaps you’re working on a sweepstakes marketing campaign and your client refuses to put some required fine print on the poster (in this situation, don’t forget to save your communications). When they get hit with a huge government fine, they blame you for the omission.
Is this type of insurance really necessary?
If you work with corporate clients with strict legal departments, lawyers or other professionals who are very law-savvy, or heavy legalese (such as disclosures or sweepstakes-style campaigns), professional liability insurance might be a good safeguard for you.
However, if you’re working with clients who don’t have the time or money to sue you unless you do something REALLY egregious, it’s probably not worth the expense.
General liability insurance, in my opinion, is the least necessary of the three for the typical freelance designer. It covers a third party’s:
- Injury and medical bills
- Property damage
- Loss of data due to equipment damage
- Libel or slander arising from your spoken or written words
- Loss due to actions of temporary staff
For example, if you do on-site photo shoots with photography equipment that can present trip hazards, you might consider general liability insurance.
However, if you’re like me, the vast majority of your work is done away from the general public and therefore you’re probably not at risk enough to justify the expense.
Business Owners Insurance
Business Owners Insurance combines general liability coverage with protection for your business equipment and data.