I'm going to share true stories of designers, developers and creatives getting into difficulty with their work. These situations are exactly what business insurance is designed for.
Scare tactics aren't part of our marketing strategy at With Jack, but if we don't share stories like these then freelancers won't be educated about how insurance can help keep them in business.
Client expectations not being met
Ellie, a developer, was starting her career when she was hired to build an eCommerce site. She did everything right by having her client sign a contract and delivered work on time. Where things fell short was that the work didn't meet her client's expectations.
The client wasn't happy with the site and claimed it didn't work as they had outlined. They threatened to sue Ellie and even took their claim to small claims court where they were awarded damages.
If only the developer had professional indemnity insurance. This would have provided Ellie with legal experts to negotiate with her client on her behalf. Ellie's insurance would have covered the damages that were awarded to her client as well as the legal fees involved in the defence of the claim. It's likely the legal experts would have prevented it from reaching court.
There are many stories similar to this. A graphic designer, Leon, faced legal action because their client was unhappy with the quality of work they provided.
Leon's job was to create banners for a trade show. The images for the banners were supplied by the client, but they didn't translate well to print and the client held the designer responsible. This is one of the riskiest aspects of freelancing—whilst you can control the quality of your work you can't control how your client reacts to it.
The client's reason for claiming damages was "poor quality of work" and the job not being completed to spec. Again, this situation is what professional indemnity insurance was designed to assist with.
Late delivery of work
Joel was contracted to design a website. For various reasons, the project took longer to complete than agreed.
The client refused to pay Joel's invoice and cited the reason as "lost confidence in the work being completed". This came as a shock to Joel—the client had seemed understanding of the delays.
Joel received a letter from the client's legal team suing for loss of business. Fortunately, Joel had professional indemnity insurance.
Your insurer will appoint solicitors to defend you. In this case a solicitor was appointed by the insurer and Joel provided a timeline of evidence. This helped the insurer defend Joel's right to invoice for the work completed.
Pro tip: Always keep an audit trail of evidence. Client emails, contracts, client sign-off. This can come in handy if a project doesn't end smoothly and things turn nasty.
Because the cost of the claim was greater than the invoice owed, the insurer paid the amount owed to the designer instead of letting things escalate to legal action. This is known as mitigation costs clause and is a really useful feature of the professional indemnity policy.
This is a common scenario. A gradual breakdown in a client relationship can lead to unpaid fees. If your client is dissatisfied with your work, refuses to pay for any or all of your fees and threatens to bring a claim against you, the insurer will pay you the money owed to you if they believe it will avoid a claim for a greater amount.
Copyright infringement and intellectual property
Copyright infringement is one of the biggest cause of claims against designers. But it's not just designers that are victim to these types of claims.
A software business was sued for copyright infringement and breach of contract due to unlicensed-font-usage.
They used a licensed typeface without purchasing the correct license for a template they designed. The template was then made available to the public, but this wasn't permitted by the license.
The scope of copyright infringement claims is wide. There could be cause for a claim if any copyrighted materials are used in a website, if a logo design resembles an existing trademark or even for using licensed material in your portfolio for speculative work. We've seen it all.
The professional indemnity policy has a copyright infringement clause that will help defend you against claims of unintentional copyright infringement.
There are many more scenarios your insurance can help with
Professional indemnity insurance covers a broad range of situations beyonf the horro stories we've shared above. If your work doesn’t meet client expectations, is delivered late or fails due to a mistake a client could bring a claim against you.
Business insurance covers compensation to the client as well as legal expenses to defend yourself. Any of the above businesses could have resolved matters without being out of pocket beyond the £14/month their insurance policy costs them.