In this article we will be looking at a guide on business insurance for graphic designers and developers. At some point in their career, most web designers and developers can deal with scaling issues, unexpected project delays, broken customer relationships, and unpaid bills.
The good news is that there is an insurance policy out there to help with these scenarios. In the UK, it is called “Professional Indemnity Insurance”. In other places, it may be called “Professional Liability” or “Errors and Omissions Insurance.”
Let’s explore what this business insurance for graphic designers is and how it is designed to keep web professionals in business.
What Is Professional Liability Insurance?
Professional indemnity insurance protects your business from mistakes and annoying clients.
Suppose a customer threatens legal action and claims loss of income or damages because of the service you provided. Even if you are wrong, professional compensation will step in to make sure that the consequences for your work will not hold you back.
It is also important to distinguish what is not professional civil liability insurance. After all, business insurance is an umbrella term for different types of coverage. One such coverage is liability insurance, or general liability insurance as it is known in the United States.
- Civil liability insures your business against claims from:
- Bodily injuries to customers and members of the public.
- Accidents in your workplace
- Damage to third party property.
This is a common coverage for those who have clients visiting their offices or those who work from the client’s premises. However, in this article, we focus exclusively on professional compensation.
How Business Insurance For Graphic Designers Or Developer Help?
Commercial insurance is often not talked about in web circles. I think this is because insurance companies have focused their products and user experience on traditional industries. A lot of the information that exists is not relevant to those of us who work in the digital field.
To add to this, people do not consider working with a computer a great risk or responsibility. Especially when you have all of your customers sign a contract. This can lull designers and developers into a false sense of security. Some of the common objections I hear from professionals when it comes to insurance:
I can’t do any harm as a designer. For anything that goes wrong, I have a clause in my contract that says I am not responsible.
First of all, I have to debunk the myth that you don’t need insurance because you work under contract. Contracts do not absolve you of liability. They are useful in laying the groundwork for the duties expected of both parties, but insurance begins when those duties are called into question.
Every scenario I’m sharing today was a combination of the following:
- The contract was signed by both parties.
- They have years of experience in their profession.
- They are professionally insured but never expected to have to use their insurance.
What Does The Professional Compensation Policy Cover?
Professional indemnity insurance is a basic policy, so it is not possible to cover all scenarios here. Essentially, it is designed to return your business to the same financial position after the loss as it was before the loss. As you can see from the stories above, the loss can be legal fees, customer damages, compensation or even unpaid bills. However, this should come from a client who expresses dissatisfaction with your business.
While all professional indemnity policies differ, let’s look at some of the key features you can expect to see.
If a client sues you, your professional civil liability policy will take care of defense costs. This is not only for cases that have been taken to court. Insurance companies like to get issues resolved before they get to that point, so they will provide a team of legal experts to help negotiate terms with their clients.
INTELLECTUAL PROPERTY INFRINGEMENT
Web and graphic designers are vulnerable to arguments about copyright infringement, while developers can get into disputes over who owns the code. This clause covers claims against copyright infringement, trademarks, logos, and even domain names.
If you read the stories above, you’ll see the mitigation costs mentioned as the insurance company paid the unpaid bills. If a client is unhappy with your work, refuses to pay some or all of your fees, and threatens to sue you, professional compensation can pay the amount the client owes you. This is only if the insurance company thinks it will prevent a claim for a larger amount.
Negligence covers a wide spectrum, but think of this as a guarantee of any mistakes you make that lead to an unsatisfied customer.
UNINTENTIONAL BREACH OF CONTRACT
A breach of contract can take many forms. It could be something as simple as not delivering a project on time or failing to meet customer expectations. Any breach of contract may give the customer the right to sue you.
How Business Insurance for Graphic Designers Can Help You Build A Ballistics Business
When I see newcomers asking for advice on starting their business in the web industry, I see a lot of suggestions that look like this:
- “Get an accountant right away.”
- “Build a network!”
- Urge your clients to sign a contract.
- “Monitor your cash flow!”
This is all great advice of course, but I rarely see anyone mention it for sure. Business Insurance for Graphic Designers should be an important part of any professional designer or developer’s toolbox.
Providing your professional services to clients involves a certain degree of risk. It is your responsibility to mitigate this risk. You need to make sure that if something goes wrong, you can get back to work quickly. There may be issues with errors in your business, a deteriorating relationship, or a customer claiming to be unhappy with your service. No matter how cool you are, these things happen!
That’s why I’m sharing these stories, to highlight the importance of business insurance for graphic designers. I want professionals to not only think about insurance but also understand it. Insurance is something we don’t necessarily want to budget or think about, however, as professionals, we have to. The article above show how important this is.
As it’s important to have business insurance for graphic designers, So yeah, work with a contract. Control your cash flow. Have an accountant do the bookkeeping, but also get insurance. There is little point in building your own business only to have a problem or the wrong client take you out.