Why do web designers need professional indemnity insurance?
The professional indemnity policy is a meaty cover with lots of features designed to help web designers facing legal disputes. With most claims arising from project management issues or dissatisfaction with the final product, let’s look at the policy features that web designers will find most useful.
Mitigation costs (unpaid invoices)
If your client isn’t happy with your work, refuses to pay your invoice and accompanies that refusal with a threat, the insurer will pay you the money owed to you if they believe it will avoid a claim for a greater amount. Considering the professional indemnity policy is triggered with a threat of legal action or a client trying to recover monetary damages, it’s safe to assume your relationship with your client isn’t in a good place so they might not pay you.
Breach of contract
We’ve mentioned project management issues causing a lot of headaches for freelancers. If work is delivered late or not to the project spec this can lead to accusations of breach of contract. Usually breach of contract accusations are accompanied with a demand for compensation i.e. ”The launch of our website is massively delayed which has cost us thousands of pounds in lost business”.
Negligence
This is the bread and butter of the professional indemnity policy because it covers a wide range of scenarios. If your client believes you’re in the wrong and your mistake has cost them money, they can look to recover those costs from you. An example would be your client believing you haven’t completed the work to spec, hiring other freelancers to complete the work and expecting you to cover the extra costs they’ve incurred.
Most of our customers are designers so we’ve seen many situations where a freelance web designer has needed to call on the help of their insurance. Here’s just one example.
A web designer was contracted to design a website for a client. Over time their relationship gradually broke down due to the client shifting the goalposts.
The scope had changed since the initial project, and the work the designer had agreed to and quoted for was drastically different. On top of this the client wasn’t pleasant to deal with, which caused the relationship to gradually break down.
After feeling overworked, underpaid and unhappy, the designer decided to cease working with the client and gave their notice to terminate the contract.
The client hit back with the following claims;
- Damages for loss of income as a result of the delayed launch of the website
- Compensation for hiring other web designers to complete the project
Fortunately the web designer had professional indemnity insurance arranged by With Jack. The insurer immediately appointed a team of legal experts to negotiate with their client and a settlement was agreed out of court. The cost of the legal experts was included in the policy, as was the compensation that had to be paid to the client.
The web designer didn’t have to trawl the web looking for the right lawyer, nor did they have to pay expensive, upfront fees for a consultation on how to handle the situation. They also weren’t out of pocket with the damages that had to be paid to their client. Their insurance handled it all.
As a freelance web designer it’s not just your creativity and skillset that comes into play. Delivering projects on time and making sure client expectations are met are equally as important. It’s a good idea to have insurance for those bumps in the road.
Being insured not only puts you in a better position to fix a wrong, but it gives clients confidence that they’re working with a trusted professional.
We’ve talked about what features insurance has that can help you, real stories from freelancers that have had to use their insurance and how much it costs. It’s now over to you to take the next step and get a quote.
