Client Project Has Stalled. What Now?

Projects get derailed for a number of reasons. Sometimes the client hasn’t provided the deliverables that you need or maybe you’ve had circumstances outside of your control affect how much work you’ve been able to do. We look at how you can keep projects moving, and how insurance can help you if your client is unhappy with the project's progress.

09Dec'19

In episode three of Unsure? Insure! we cover how to keep projects flowing.

Projects get derailed for a number of reasons. Sometimes the client hasn’t provided the deliverables that you need to complete your work. Maybe you’ve had circumstances outside of your control affect how much work you’ve been able to do. Other times communication can be slow, to the point it causes the project to fizzle out.

Let's talk about how you can keep projects moving, and how insurance can help you if your client is unhappy with the project’s progress (even if it is their fault!).

To prevent projects from stalling you need to have payment terms that are going to incentivise the client to keep the project moving, such as billing to specific dates. By invoicing based on the dates you estimate a milestone to be reached, the client knows that deliverables should be supplied to you well in advance of that date.

This approach works for you because it helps you manage cashflow, and it works for the client because they have an expected date for project milestones and know when you need deliverables by (copy, photos, testimonials, etc.) This requires having a solid project scope in place, an understanding of what deliverables are needed, and a generous estimate for project timeframes.

If a project grinds to a halt, there’s a ‘pause clause’ that you can include in your contract. This will incentivise clients to provide deliverables, whether that’s input, content, payment or approvals.

If a client is late in providing deliverables, you’ll put the project on hold after some time has lapsed as stated in your contract. When the deliverable is received from the client, the project will be rescheduled based on your current workload and availability. In other words, you need to communicate with your client it could be weeks or months if a project is put on hold before you can resume work again. This incentivises clients to keep the project flowing, and frees up your time to work on projects for good clients that respect your time!

If the project has stalled for a period of time that would suggest the client’s no longer interested, please do not delete client files and the work you have already done. Specify in your contract how long you’ll keep a hold of client files—and only after that time has lapsed you can then delete them.

We’ve seen clients come back some time later and say, “Sorry for disappearing, I’m ready for this project to start back up again” and then get angry when they realise the work’s been deleted. This has lead to claims against our customers, which is why it’s important to have professional indemnity insurance in place so you have help if that does happen. This situation could have been avoided, however, if there were expectations set around how long you’ll store client files for.

This is why it’s really important to have a contract. Contracts are there to outline expectations between both parties—and back you up in the event a client says you’ve done some wrong doing.

Let’s look at how insurance can help in these situations.

If a project has stalled and a client's unhappiness is accompanied with a refusal to pay, or a demand that the freelancer compensates them for loss of income due to the delay, or an order that the freelancer should cover the cost of hiring other freelancers who have been contracted to accelerate the project’s progress, then it is possible your insurer can help you.

Let’s break down each of these situations.

Client Refusing To Pay

If your client’s refusal to pay is accompanied with a threat, “I’m not happy with how long this has taken. I want to put an end to the project. Give us the work you have completed. If not I’ll take things further” then you should contact your insurer immediately because your professional indemnity insurance might be able to help.

When this happened to one of our customers, the insurer provided legal experts to negotiate with the client in trying to get the freelancer’s invoice paid. When that wasn't successful, the policy's mitigation costs clause meant the insurer paid the amount owed to the freelancer by their client .

Client Claiming Loss Of Income Or Damages To Hire Other Freelancers

We’ve also had clients demand compensation for loss of income. Some clients have felt they’ve lost out on business because a project has stalled and missed its launch date, so they’ve lost out on expected income.

We’ve also seen clients order that damages be paid for hiring additional freelancers. With professional indemnity insurance a lot of the claims—and certainly the examples we’ve shared today—follow the same process. A legal expert is assigned to help negotiate with your client and come to an agreement of what compensation (loss of income, the cost of hiring new contractors) has to be paid. The cost of those legal experts and compensation is covered under your insurance.

To recap, your client project has stalled. What now?

  • Keep projects moving by billing to specific dates so that your client knows when project milestones should be reached and will provide deliverables in advance of that date, and it also helps you from a cashflow perspective
  • Add a ‘pause clause’ to your contract so clients are incentivised to keep the project flowing, otherwise they risk an even bigger delay whilst you reschedule them based on your current availability
  • Be very careful when deleting client files even if you haven’t heard from the client in a long time. State in your contract how long you’ll keep a hold of files
  • Professional indemnity insurance will help you if clients aren’t happy with a project’s progress and blame you for loss of income, or ask for compensation for hiring other freelancers

We asked ourselves one important question …

What do we want out of an insurance provider?

With Jack is the answer