Even if your to-do list seems a mile long, taking steps to ensure your freelance writing business is protected from potential liabilities can’t afford to wait.
That said, it doesn’t have to be a daunting or time-consuming process. Start with these three steps and you’ll be well on your way to safeguarding your finances and your reputation.
Think proactively about professional liability risks.
Sure, thinking about risks to your business may be the last thing you want to do after pouring yourself into your work, but it’s one of the best ways to protect yourself from unexpected — and potentially super expensive — surprises (read: lawsuits) down the line.
Some of the biggest professional liability risks for freelance writers include libel, slander, defamation, copyright infringement, and errors and omissions (essentially any alleged mistakes or negligence on your part). Challenge yourself to consider all the ways your work could potentially cause clients, or third parties, a financial loss. Those are all valid concerns.
Being vigilant to minimize these risks is, of course, important; however, you can be sued for these types of claims whether you’re at fault or not and find yourself in a situation where you’re engaging legal counsel to rightfully defend your case. That’s a costly endeavor, and tens of thousands of dollars in legal fees could just be the tip of the iceberg if you’re ordered to pay any type of compensation to your client, a subject or a third-party plaintiff. This is where professional liability insurance, which can help defend you and provide coverage for these costs, comes into play.
Find an insurance partner that works for you.
Finding the right insurance partner is more than half the battle. If you have ever looked into getting professional liability coverage before, you know full well that most traditional policies are not designed for freelancers, and that many providers don’t offer media liability coverage for the specific risks writers face in the first place.
As you do your research to find an insurance partner that works for you, be sure to investigate or ask:
1. Do they offer media liability coverage for libel, slander, defamation and copyright infringement?
2. Do they provide additional coverages that are relevant to my business, and at what cost?
3. Do they offer worldwide coverage?
4. Is the insurance A+ rated?
5. Do they have lawyers who specialize in professional liability claims available to defend me, if I end up needing them?
6. Can I get a quote and buy a policy online?
7. How long does it take to buy a policy, and what does the process entail?
8. What’s the process for filing a claim?
9. What type of customer support do they offer?
10. What’s the cancellation policy?
Select the right coverage.
The level of professional liability insurance you need depends on the work you are doing and the size of potential claims. For instance, a political writer contributing to national publications will likely need more insurance than a historian who writes books about the Civil War. As a rule of thumb, imagine the worst financial loss you could create for your clients, then double it to include legal fees and round it up to the next available limit.
There are two types of limits for professional liability policies:
· Each claim limit – the maximum amount of coverage provided for a single claim during the policy period
· Policy aggregate limit – the amount of coverage the policy will pay in total during the policy period
Let’s say you select a $100,000 each claim limit and a $250,000 aggregate limit, written as $100,000 / $250,000. This means you have cover up to a maximum of $100,000 for each claim you make and total cover up to a maximum of $250,000 during the policy period. You could have two claims for $100,000 each and another claim for $50,000, or you could have five $50,000 claims during the policy period.
You’ll also want to carefully consider your self-insured retention — the amount you must pay for a claim before the insurer pays its share of a claim. For example, if there is a claim for $5,000 made against you and you have a $500 retention, you pay $500 and the insurer pays $4,500.
You’ll need to think about what’s most appropriate for you. Keep in mind, you can also consult with an insurance partner that can help guide you through the process. Our team at Dinghy is always up for a chat, no strings attached.
Whichever path forward you take, it sure beats crossing your fingers and hoping getting sued won’t happen to you.