Can you tell me about liability insurance for writers?
February 21, 2024 1:14 PM Subscribe
A potential client just asked me if I have liability insurance. I don't, but I'd be willing to get it if this client were going to hire me. If you have this insurance, can you tell me roughly how much it costs, and also how long it takes to get it?
The costs of insurance can depend on where your clients are, what legal jurisdiction would apply, and what kind of risk profile / liabilities could arise from your work.
To find out how much insurance will cost, you need to seek a few quotes. The level of risk and costs of insurance depend on the details of your situation. You can search for insurance brokers that offer insurance in your state / for your profession, or if your situation is simple and quite common, there might be a streamlined online insurer offering fast, cheap professional indemnity & public liability policies that cover your situation. If you have peers in your industry niche you can talk to, ask them if they have professional indemnity insurance & if they recommend anyone.
Small example: suppose you agree to do a small contract to update a client's website content and make a typo in their customer-facing phone number, and they lose out on $1m of sales over a couple of weeks before anyone notices the phone number is wrong. Maybe they've agreed to pay you $5k for this relatively small piece of work, but due to your error while delivering the work, they've suffered $1m of damages.
From the perspective of potential clients, you having professional indemnity insurance gives them confidence that in the unlikely event that some error or omission in your work causes their business $1m of damages, then given you have a professional indemnity insurance policy in place with $1m of cover, they know there's a pot of insurance money they can attempt to recover from. Without the insurance, they can still try to recover damages from your business / you personally, maybe you/your business could still be found liable for $1m of damages, but if you only have $100k of assets then your client is still going to be short the remaining $900k.
From your perspective as the service provider, having professional indemnity and public liability insurance makes it less likely that you lose all your business' assets and/or personal assets in this kind of scenario. From my perspective, this is the number one benefit of having professional indemnity insurance coverage - the additional benefits of helping win more work is secondary.
When you have an insurance policy in place, your insurer can provide you with a "certificate of currency" that lists a summary of insurance coverage & the amount of cover you are insured before - this can be shared with clients/potential clients upon request to provide evidence that you have insurance, and may help you win more work.
posted by are-coral-made at 2:14 PM on February 21 [1 favorite]
To find out how much insurance will cost, you need to seek a few quotes. The level of risk and costs of insurance depend on the details of your situation. You can search for insurance brokers that offer insurance in your state / for your profession, or if your situation is simple and quite common, there might be a streamlined online insurer offering fast, cheap professional indemnity & public liability policies that cover your situation. If you have peers in your industry niche you can talk to, ask them if they have professional indemnity insurance & if they recommend anyone.
Small example: suppose you agree to do a small contract to update a client's website content and make a typo in their customer-facing phone number, and they lose out on $1m of sales over a couple of weeks before anyone notices the phone number is wrong. Maybe they've agreed to pay you $5k for this relatively small piece of work, but due to your error while delivering the work, they've suffered $1m of damages.
From the perspective of potential clients, you having professional indemnity insurance gives them confidence that in the unlikely event that some error or omission in your work causes their business $1m of damages, then given you have a professional indemnity insurance policy in place with $1m of cover, they know there's a pot of insurance money they can attempt to recover from. Without the insurance, they can still try to recover damages from your business / you personally, maybe you/your business could still be found liable for $1m of damages, but if you only have $100k of assets then your client is still going to be short the remaining $900k.
From your perspective as the service provider, having professional indemnity and public liability insurance makes it less likely that you lose all your business' assets and/or personal assets in this kind of scenario. From my perspective, this is the number one benefit of having professional indemnity insurance coverage - the additional benefits of helping win more work is secondary.
When you have an insurance policy in place, your insurer can provide you with a "certificate of currency" that lists a summary of insurance coverage & the amount of cover you are insured before - this can be shared with clients/potential clients upon request to provide evidence that you have insurance, and may help you win more work.
posted by are-coral-made at 2:14 PM on February 21 [1 favorite]
In the UK, it is common for writer organisations and unions to provide this. So you may already have it if you are a member of any. A cursory search brought up this, for example, which I can't vouch for as I don't know the US context, but is indicative that the same sort of thing goes on.
posted by einekleine at 2:24 PM on February 21
posted by einekleine at 2:24 PM on February 21
Another tip: make sure you have a contract in place signed by you and the client before any work is commenced. This contract should include a clause limiting your liability for damages that the client may suffer as a consequence of your work -- for example, this could be limiting your liability to the fees charged under the contract, or the fees charged to the client by you during the last 12 months. e.g. if the client agrees to pay $5k for the work, and they suffer $1m in damages through your error or omission, with this limitation of liability clause in place, they amount you are liable for is capped to fees paid: $5k.
Your professional indemnity insurer may request/require that you have such clauses in place covering all work that you do as a condition of them insuring your business, so if you don't have a standard contract ready that includes limitation of liability clauses, you may also need some legal assistance in drafting one. This kind of thing is very standard request but could end up costing another $1k or so in legal fees.
posted by are-coral-made at 2:25 PM on February 21 [2 favorites]
Your professional indemnity insurer may request/require that you have such clauses in place covering all work that you do as a condition of them insuring your business, so if you don't have a standard contract ready that includes limitation of liability clauses, you may also need some legal assistance in drafting one. This kind of thing is very standard request but could end up costing another $1k or so in legal fees.
posted by are-coral-made at 2:25 PM on February 21 [2 favorites]
One million years ago when I looked into this, I discovered that the umbrella insurance I already had covered me.
posted by The corpse in the library at 3:24 PM on February 21
posted by The corpse in the library at 3:24 PM on February 21
>and also how long it takes to get it?
I had to get insurance as an IT contractor. It took about a week. It was all doable online and via phone calls, no need for paper forms. You find a broker in your state who covers writers, call them and explain what you need, they'll send you a form to fill out, with various checkboxes to estimate how risky your work is. There will also be checkboxes for what types of coverage you want. As a programmer, they asked me questions about whether I followed certain best practices (like keeping backups, having antivirus, etc) , whether my work would be related to safety sensitive processes, running critical infrastructure, handling credit card info, etc. They also asked about the size of my contracts (in dollars). I filled out the form, the broker sent it off to the underwriters, who returned back a dollar amount for a year of coverage.
My client required that I have 1million in coverage, as well as a few of the "optional" coverage items, and it cost about $1k USD per year. I don't know how that relates to coverage for writing.
posted by mrgoldenbrown at 3:26 PM on February 21 [1 favorite]
I had to get insurance as an IT contractor. It took about a week. It was all doable online and via phone calls, no need for paper forms. You find a broker in your state who covers writers, call them and explain what you need, they'll send you a form to fill out, with various checkboxes to estimate how risky your work is. There will also be checkboxes for what types of coverage you want. As a programmer, they asked me questions about whether I followed certain best practices (like keeping backups, having antivirus, etc) , whether my work would be related to safety sensitive processes, running critical infrastructure, handling credit card info, etc. They also asked about the size of my contracts (in dollars). I filled out the form, the broker sent it off to the underwriters, who returned back a dollar amount for a year of coverage.
My client required that I have 1million in coverage, as well as a few of the "optional" coverage items, and it cost about $1k USD per year. I don't know how that relates to coverage for writing.
posted by mrgoldenbrown at 3:26 PM on February 21 [1 favorite]
Heads up - people sharing anecdotes of insurance quotes from outside the US are interesting but unlikely to apply to OP's situation. The US's legal system, culture regarding litigation & magnitude of damages awarded is different (read: higher risk) compared to doing business in the UK or many other countries. The higher probability of litigation & higher probability of rare outcomes with absurdly high damages results in higher risk for insurers and higher premiums covering work done in the US. Get in touch with a few local insurance brokers, get quotes.
posted by are-coral-made at 3:56 PM on February 21 [5 favorites]
posted by are-coral-made at 3:56 PM on February 21 [5 favorites]
When I freelanced I bought mine through the Freelancers Union. It was an easy quick process and I don’t recall it being a big expense.
posted by veery at 5:11 PM on February 21
posted by veery at 5:11 PM on February 21
For a US datapoint, I'm a freelance photographer in WA with liability up to 2 million and equipment insurance (for approximately $30k in equipment) and I pay around $800/year through Travelers.
If the client requires this, you could possibly pad one of your line items on invoices to make up some of the cost with each invoice. Or just have an insurance line item at $75 or $100 per invoice if the client can handle it.
posted by msbrauer at 5:12 PM on February 21 [1 favorite]
If the client requires this, you could possibly pad one of your line items on invoices to make up some of the cost with each invoice. Or just have an insurance line item at $75 or $100 per invoice if the client can handle it.
posted by msbrauer at 5:12 PM on February 21 [1 favorite]
Freelancers Union is pleased to partner with Hiscox to offer liability insurance... [2020 blog post re: writer's insurance at the Union, written by then-partner Dinghy, no longer accepting new policyholders]
At Hiscox, "currently licensed to offer professional liability insurance coverage in 49 states across the US (excluding Alaska)": Professional liability insurance [see: errors and omissions insurance (E&O insurance)] protects your business if you are sued for negligence in performing your professional services, even if you haven’t made a mistake.
Q: I need professional liability for a contract. Is immediate coverage available?
A: Yes, it is. Many clients require their consultants or contractors to have a minimum level of professional liability insurance coverage before they can start a professional engagement. Typically, they will want to see proof you have $1,000,000 of professional liability insurance. We can provide this for you online immediately, or you can call one of our expert advisors and your policy will be issued via email, typically in about 15 minutes. You will also receive a certificate of insurance, which you can then email to your client as proof of insurance.
Q: How much does Professional Liability Insurance cost?
A: The cost of professional liability insurance coverage varies based on the size of your business, the industry you are in, your location, and the amount of coverage you need.
[Scrolling down, a Hiscox chart shows a $500,00 policy with a $5,000 deductible, purchased by an "IT Consultant" in California, as $36.75/month or $441/year. Toward end of page, "Our minimum premiums start from $270 a year." ]
"Who we cover": Small Business Owners, LLC, Sole Proprietors, Entrepreneurs, Side Hustle, Contractors, Home Businesses
[Hiscox partners with Thimble to offer short-term insurance, but Thimble does not currently offer professional liability insurance in New York.]
Writers & Authors Insurance quote generator from single application at broker Insureon.
Professional Liability Insurance member benefit at the National Association for the Self-Employed; "This program can be tailored to the specific needs of each self-employed member’s specific profession and exposures while protecting their business from claims alleging real or perceived negligence, errors, omissions or failure to perform. This critical insurance also provides coverage for services performed for clients or if the member is named in a 3rd party lawsuit."
posted by Iris Gambol at 7:23 PM on February 21 [3 favorites]
At Hiscox, "currently licensed to offer professional liability insurance coverage in 49 states across the US (excluding Alaska)": Professional liability insurance [see: errors and omissions insurance (E&O insurance)] protects your business if you are sued for negligence in performing your professional services, even if you haven’t made a mistake.
Q: I need professional liability for a contract. Is immediate coverage available?
A: Yes, it is. Many clients require their consultants or contractors to have a minimum level of professional liability insurance coverage before they can start a professional engagement. Typically, they will want to see proof you have $1,000,000 of professional liability insurance. We can provide this for you online immediately, or you can call one of our expert advisors and your policy will be issued via email, typically in about 15 minutes. You will also receive a certificate of insurance, which you can then email to your client as proof of insurance.
Q: How much does Professional Liability Insurance cost?
A: The cost of professional liability insurance coverage varies based on the size of your business, the industry you are in, your location, and the amount of coverage you need.
[Scrolling down, a Hiscox chart shows a $500,00 policy with a $5,000 deductible, purchased by an "IT Consultant" in California, as $36.75/month or $441/year. Toward end of page, "Our minimum premiums start from $270 a year." ]
"Who we cover": Small Business Owners, LLC, Sole Proprietors, Entrepreneurs, Side Hustle, Contractors, Home Businesses
[Hiscox partners with Thimble to offer short-term insurance, but Thimble does not currently offer professional liability insurance in New York.]
Writers & Authors Insurance quote generator from single application at broker Insureon.
Professional Liability Insurance member benefit at the National Association for the Self-Employed; "This program can be tailored to the specific needs of each self-employed member’s specific profession and exposures while protecting their business from claims alleging real or perceived negligence, errors, omissions or failure to perform. This critical insurance also provides coverage for services performed for clients or if the member is named in a 3rd party lawsuit."
posted by Iris Gambol at 7:23 PM on February 21 [3 favorites]
Ok, I love insurance questions, it’s my field. I suspect you’re a technical writer with a potential contract at a not stupid corp, could be otherwise, answer is the same. You can get “liability” insurance tomorrow by walking into any insurance agent’s office. I always suggest you go to an independent agent, you can tell an independent agent from a captive agent because the independent agent will be called something like “Bob’s Insurance” and there will be no State Farm, Farmers, Allstate, etc branding on the sign. Independent agents know insurance, captive agents, the branded ones, just know what they sell.
Anyway, you’re real small time it doesn’t matter where you go really if what you need to make this person happy with “liability insurance”. That’s a Commercial General Liability policy. Which if you have a business, you should have. Just guessing, that will be a $500 annual policy for you. That’s a standard minimum premium, which you’re at. BOOM you have liability insurance. It covers bodily injury and property damage.
That’s pretty useless for a writer, and why so cheap. If potential client is a business, or someone that used to own one, normal requirement is that anyone they contract with, for whatever purpose, have liability insurance. Clean the window, write me a poem, need liability insurance.
Professional Liability Insurance, mentioned above, in horribly mis understood terms, might actually provide you meaningful insurance. It “could” cover failures to provide adequate writing. Costs much more, depends on revenue, not what they’re asking for.
They want you to provide a certificate of liability insurance, will cost you $500 a year to have it, agent can then generate the certs for others if you start working for lots of people asking.
posted by ixipkcams at 10:20 PM on February 21 [4 favorites]
Anyway, you’re real small time it doesn’t matter where you go really if what you need to make this person happy with “liability insurance”. That’s a Commercial General Liability policy. Which if you have a business, you should have. Just guessing, that will be a $500 annual policy for you. That’s a standard minimum premium, which you’re at. BOOM you have liability insurance. It covers bodily injury and property damage.
That’s pretty useless for a writer, and why so cheap. If potential client is a business, or someone that used to own one, normal requirement is that anyone they contract with, for whatever purpose, have liability insurance. Clean the window, write me a poem, need liability insurance.
Professional Liability Insurance, mentioned above, in horribly mis understood terms, might actually provide you meaningful insurance. It “could” cover failures to provide adequate writing. Costs much more, depends on revenue, not what they’re asking for.
They want you to provide a certificate of liability insurance, will cost you $500 a year to have it, agent can then generate the certs for others if you start working for lots of people asking.
posted by ixipkcams at 10:20 PM on February 21 [4 favorites]
Seconding everything ixipkcams wrote. As the owner/operator of a NY small business, my response would be, "Can you share a sample Certificate of Insurance that shows the coverage you require? I can check with my insurance agent."
You don't have to say that you haven't yet chosen your agent! Using that sample COI, talk to some independent brokers familiar with your industry, and get some quotes. A good broker will also tell you what coverage your clients may be requesting that they don't *really* need given your work, and that you might push back on. For example if their sample COI is overly broad and asks for $5MM of Umbrella Liability, that'd be more appropriate for a contractor doing heavy work onsite, but it just might be on their default form and they'd be fine to omit it in your case if asked.
I'd guess that they are just checking an admin box somewhere saying "all subcontractors must carry their own liability insurance" to support their classification of you as an independent contractor and not an employee.
posted by hovey at 6:33 AM on February 22 [2 favorites]
You don't have to say that you haven't yet chosen your agent! Using that sample COI, talk to some independent brokers familiar with your industry, and get some quotes. A good broker will also tell you what coverage your clients may be requesting that they don't *really* need given your work, and that you might push back on. For example if their sample COI is overly broad and asks for $5MM of Umbrella Liability, that'd be more appropriate for a contractor doing heavy work onsite, but it just might be on their default form and they'd be fine to omit it in your case if asked.
I'd guess that they are just checking an admin box somewhere saying "all subcontractors must carry their own liability insurance" to support their classification of you as an independent contractor and not an employee.
posted by hovey at 6:33 AM on February 22 [2 favorites]
I am self-employed (my main work is lecturing, writing, and consulting) and have professional liability insurance (aka errors and omissions insurance) plus general liability insurance through Hiscox. My policy is around $960 a year, but I pay the charge semi-annually ($480/2x a year). I am a sole member LLC, and the policy is for my LLC.
I have found it handy to have certificates of insurance coverage for some of my clients (especially universities). Sometimes they ask for a certain level of coverage and I carry less, but I usually find that if I can specify what levels of coverage I carry and supply my certificates, it's usually OK with my clients.
I have never had to file a claim or actually use my insurance, so no advice there. I am very risk averse and a very CYA person, and so I figure if the cost of this insurance helps me sleep better at night, it's worth it.
posted by mostly vowels at 9:43 AM on February 22 [1 favorite]
I have found it handy to have certificates of insurance coverage for some of my clients (especially universities). Sometimes they ask for a certain level of coverage and I carry less, but I usually find that if I can specify what levels of coverage I carry and supply my certificates, it's usually OK with my clients.
I have never had to file a claim or actually use my insurance, so no advice there. I am very risk averse and a very CYA person, and so I figure if the cost of this insurance helps me sleep better at night, it's worth it.
posted by mostly vowels at 9:43 AM on February 22 [1 favorite]
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posted by underclocked at 1:40 PM on February 21 [1 favorite]