Time is money when you work for yourself, so let’s get right to the point and you can get back to earning a living. There are three really good reasons why you need some basic small business insurance coverage:
- We live in a litigious society where people will sue at the drop of a hat (or in your case, a typo in a brochure).
- Stuff happens -- theft, hackers, bad weather, accidents can all put a dent in your earning power.
- Some clients may insist that you carry certain kinds of liability coverage.
The rest of this article will give you a quick overview of the types of liability insurance available for graphic designers and freelance artists. Then you’ll be better equipped to decide which policies make the most sense for your situation, and you can get competitive quotes for that coverage here.
General Liability Insurance for graphic designers
GLI protects you from most common third-party law suits filed by clients, vendors and anybody else who feels doing business with you harmed their reputations, committed copyright infringement, slander or libel, damage their property or caused a physical injury. That includes the guy who trips and breaks his arm making a delivery to your office. Note, however, that GLI does not cover you from a lawsuit by that assistant you just hired.
Property Insurance for graphic designers
Ever thought about what would happen if a fire destroyed your office or somebody broke in and stole your computer or a bad storm trashed the place? Property insurance covers those losses. If you work out of your home, your homeowners or renters policy may not cover your commercial property adequately or at all. A separate commercial property insurance policy will. You’ll need to decide whether you want Actual Cash Value or Replacement Value coverage. ACV pays the depreciated value of lost property; Replacement Value pays what it costs to replace losses at today’s prices.
Business Owner Policy for graphic designers
BOPs bundle GLI and Property insurance together. Just like your cable company’s bundle, a BOP can mean lower prices (in the form of a cheaper premium) than if you purchased the policies separately. They can be a good deal for a small business.
Errors and Omissions insurance for graphic designers
They’re called E&Os for short, or Professional Liability, and they cover your assets if a client decides your work was inferior, didn’t come up to spec as promised or wasn’t completed as promised. Because you’re a freelancer working on crazy deadlines and small margins, you didn’t bother with an iron-clad contract. E&O will cover you if your client sues.
Cyber Liability Insurance for graphic designers
This isn’t just for big ad agencies. Cyber liability insurance protects you if your computer is hacked and files are stolen (files that may include clients’ sensitive information and confidential data). It protects you if a website you designed or coded is hacked or has malware issues. And, it sounds really good in a pitch to let your client or prospect know you have this level of protection. It can be a bit pricey for a freelancer, but if you do a lot of online work, it could also be a wise investment (and, like all business insurance, it’s a tax deduction).
Additional small business policies to consider
If you have an employee, you will also need to carry Workers Compensation Insurance (WCI). This will protect you if your employee is injured on the job or is made sick by working conditions. Most states require that you carry a minimum amount of Workers Comp. Many clients will want to see proof that you have it. If you don’t have employees, you not only don’t need this, you actually can’t buy it.
If you have employees, you might want to consider Umbrella Insurance. Also called Excess Liability, these policies bundle general liability, commercial auto and employer’s liability to cover Workers Comp lawsuits that exceed the limits of your WCI coverage.