What I’m reading: The Racketeer by John Grisham
What’s on the iPod: Would You Fight for My Love? by Jack White
A good day yesterday — one project draft done and another started. Plus I nailed down an interview that took weeks to get. It was worth the wait.
There’s been a lot of talk lately about insurance — chiefly, some clients are starting to require that we freelance writers carry liability coverage. Depending on the client contract, the amount required ranges somewhere between $500,000–$2 million. Plus, each time I’ve seen the requirement, it’s been coupled with mandatory workers compensation insurance for the same amount.
And it’s total bullshit.
So why is it being presented as a deal-breaking requirement? Because too often, clients are using standard contractor agreements typically used for builders, janitorial services, or any service setting foot on their property. And they’ve not bothered to create a contract that applies to a different kind of trade — the creative services profession. However, they’ve amended just enough to pass all liability for any mistakes made in writing on to us.
How damn special.
So when it comes to liability insurance, should you or shouldn’t you?
I say you should when you perceive a need, not when you’re being expected to assume a need. My personal opinion is that no writer should sign an agreement that puts them on the hook for a company’s risks. It’s like asking a homeowner to pay for street repairs in front of their house. It’s too much a responsible-by-association tactic, and it’s unfair to be expected to assume such risks.
In the few cases where it was made a condition of my agreement, I had it removed from the contract or I requested an exception, citing that the language didn’t exactly apply to me.
But that doesn’t mean I didn’t get push-back. I did. Big time. In one case, it cost me ongoing work. Am I sorry for that? Not at all.
The terms of that agreement were far from reasonable — the company wanted me to assume all liability for any activity connected to that project. That included actions of their own employees, and for six months beyond the end date of the project. So if Dorothy, their copy editor, didn’t do any fact-checking on information they supplied, I was on the hook for it. I was also told I’d be responsible for damages should plagiarism come into play — if Fred decided a month after the fact to include in that project some information from a source and not apply attribution, guess who’s paying?
The problem with these insurance requirements goes beyond the obvious transferring of all the risks to us writers. First, what they consider adequate (enough to cover their $2 million requirement) coverage isn’t always possible to get. If you can find it, you’re paying at least $1,000 a year for it. (I was told by an insurance broker it wasn’t possible to get $2 million.) Second, you don’t need workers compensation insurance. That’s for an employee, and it’s for a contractor who works onsite and has staff that could have injuries.
Worse, I’ve seen some awful advice aimed at writers, saying we need business owners insurance for errors we might make. No, we don’t. If you buy business owners insurance, know that it does not cover your mistakes unless errors & omissions/professional liability are expressly included in the policy.
That’s not to say a business owners policy (BOP) wouldn’t be useful to you. Here’s what a typical BOP policy covers, per Nationwide Insurance:
- Property insurance, which protects your building, equipment and inventory
- Business income insurance, which covers lost income if your operations are suspended because of a covered loss
- Equipment breakdown insurance, which protects you if your equipment is damaged from power surges, mechanical breakdown, burnout or operator error
- Personal and advertising injury coverage, which covers copyright infringement, libel and slander
- Bodily injury and property damage liability, which covers those instances when your employees, products or services cause harm to other people or their property
- Medical payments coverage, which covers medical expenses resulting from injury to others on property you own or rent
- Rented vehicle coverage, which provides liability coverage for autos that you lease, hire or borrow
9 responses to “Insurance and the Freelance Writer”
Thanks for some clear thinking on this topic… like you, I've seen wishywashy to bad advice.
This is such a great post, Lori. There are so many misconceptions among freelancers about this kind of thing, yet no one really blogs about the facts. A lot of freelance writers seem to think that registering an LLC will protect you from situations like your example, but it has nothing to do with that. Thanks for the clarification 🙂
I'm sure I've mentioned it here before, but several years ago I was in negotiations to conduct a freelance writing workshop at the local public library. A couple years before a friend and I had led a basics of screenwriting workshop that went well.
The library people sounded very excited. This was at the height of the recession, which struck our community particularly hard (we had one of the highest unemployment rates in the nation for a long time), and the idea to to focus on how to launch a freelance writing career.
When the paperwork arrived, it included a form asking me to show proof of $1M worth of liability insurance (or was it $2M?) or sign a waiver accepting responsibility for any and all injuries or damage that occurred on Library premises on that particular date – it even said, "including normal wear and tear."
First: Normal wear and tear? So if a library patron destroys a book I have to pay for it?
Second: Physical injuries? How does entering a room and sitting down cause injuries, unless the facilities are in total disrepair?
Third: My workshop was going to be two hours or so, at one location, but the form covered all library facilities for that entire day.
Forth: As a tax payer, I already financially support the public library. I told them I was shocked by the forms since I assumed some of my tax dollars went toward insurance premiums that should already cover all of those things.
I asked a prolific poet I know who gives frequent presentations and workshops for the library what she did about the liability forms. She said she'd never once been asked to sign one.
Even if I had that type of insurance I would have refused to sign their form. I told them to call me when they stop trying to shift the library's liabilities onto individuals.
Sorry for all those typos above.
I forgot to add: Just a couple weeks ago, at the very same library, one patron stabbed another patron in the face. I sure hope no one signed that liability waiver for an event going on that day!
Paula, I think I remember it being for $2M, which is just insane. It's a library!
Anne, it's not an easy area to understand, so it's not uncommon to see bad advice. I was offered a BOP policy with E&O attached, but it was for so little coverage, I wondered why bother ($25K). The policy I'm considering has so many caveats (exclusions, they call them) that it sounds like they're saying "You're covered for this, except not really."
It takes an insurance company rep or a broker to really explain some of this stuff. And I've been writing about this for 15 years. They don't make it easy!
Keri, great point. An LLC does NOT protect you from loss. It protects you from possibly losing your house or your personal finances, but if you screw up or have to defend against such charges, you still have to find the money for that.
Paula, a stabbing? That's crazy! But I think a good lawyer could get someone off should they have signed that ridiculous agreement. Person A is not responsible for the actions of Person B attacking Person C with no provocation from Person A, in my opinion (totally not a legal perspective, but damn, common sense).
I turned down a gig with a Fortune 500 company a few years back, because I quickly determined the insurance was going to cost me more than the job would earn.
The only biz-related insurance I carry is disability. It's cheap, since we're in a low-risk field (aside from Paula's library-stabbing story, apparently!)
Jake, great seeing you here. 🙂
That's how one of those jobs was for me, too. The insurance — what I could get, not what they "required" — was upwards of $1,200. The job paid $500. No thanks.
Great idea to carry disability. We really have no safety net beyond a spouse should something happen.
The initial reports on TV said the victim was stabbed in the eye but apparently he was stabbed multiple times: http://www.rrstar.com/article/20150309/News/150309418
One report said they knew each other, another report said they didn't know each other. That main library branch is located downtown and has always been a daytime haven for homeless people, so it's hard to know if it was personal or random.