Hi all,

I'm a bit flabbergasted at the moment.

I just had a chat with my Insurance Agent about what type of insurance I need for this biz, and on top of the normal Public Liability he informed me I need Professional Indemnity Insurance which will cost me a minimum of $1,500 Aus. per year. (More like $2000.00 and up according to him). They don't actually offer any policies like that as they prefer not to.

Can I ask how many of you have this sort of policy??

I have a disclaimer on my site saying that any errors or misleading info in copy are the responsibility of the clients, and they must approve copy as complete and then the responsibility of its use and what results from that is theirs etc etc.

As I have just started in this biz I'm afraid an insurance bill like that is a big no go at the moment.

Any thoughts?

Cheers,
Linda.

Hi Linda,

Here are some thoughts for what they're worth:

1) Can you shop around and find a better price or perhaps lower cover? (that $2,000 might be for a $10million coverage). It's always possible that your insurance agent is being overly pessimistic (especially if it's a branch of insurance they know little about) and he could be quoting you for a higher risk business such as a law firm.

2. What risks does your service pose to a client or a business? What are their likely provable, financial losses? Could they claim that their last brochure brought them 5 new clients, whilst the one with your copy on only brought in 2, and as each new client is worth $10k, they've lost $30,000? Would any court believe such a thing, when there are so many other variables at play, most out of your control.

3) Putting a disclaimer on your website won't necessarily cover your arse, especially if it's ambiguous, or there is legislation or precedents that override it.

4) Have there been any cases of copywriters being sued by clients for anything other than non-delivery or non-performance of the expected service? (If your transactions are relatively small, then you are probably better off just refunding their fee in this kind of instance).

5) In the UK a limited company limits the liability of the owners and directors, so if someone sues you, they can't come after your house or anything owned by your personally. I imagine the same is true for a proprietary limited - this might be a cheaper alternative - just make sure you don't keep much money in the business bank account!!

In the end, your decision pivots on weighing up the pros and cons - what are the risks either way? I think speaking to a specialist insurer would be a good idea - even if only to become fully informed of the situation and the ramifications either way.

HTH,
Jane

Thank you so much for that Jane, I appreciate all your suggestions and ideas.

I certainly need to talk to a specialist insurer that's for sure. I'm not panicing about it as I'm only small fry at the moment and my fees aren't huge, but in the future it could become an issue.

I'm just a sole proprietor at the moment, so a chat to my accountant about becoming a Pty Ltd couldn't hurt. I don't think I've ever seen a single person copywriting business represented as a Pty Ltd (not over here anyway).

I think also my Insurance Agent was refering to an occasion where I may write that a client's product does something... they buy it and find out it doesn't..... and then sue me for loss of business or whatever because I wrote the copy that made them buy the product.

Arrggh - What a convoluted world we live in!

I'm off to do further investigating.

Thanks again.

Cheers,
Linda.

Linda,

I've been self-employed as a writer since 1982 and not once has there been even a whisper of someone suing me. Of course everyone's risk tolerance is different, but I suggest you consider "self-insuring" - bearing the (minimal) risk on your own.

Where did this idea that you need professional indemnity insurance come from? First get the facts about how often someone actually gets sued. Personally, I can't think of any writer I know who has gotten into legal wrangles except with the Federal Trade Commission or with respect to contract disputes or non-payment. The latter are relatively common but not something covered by insurance!

Marcia Yudkin

Hi Marcia, and thanks.

After a bit more investigation yesterday I came to the conclusion that my insurance agent, with whom we've been insured for years for another biz, was probably over reacting (understatement).

Thanks for the reassurance...

I'm now happy to mosey along doing what I'm doing without worrying too much about over dramatised scenarios that have almost zero chance of happening.

Cheers,