As a graphic designer, you may design logos for clients, craft business cards for other businesses, create stunning artwork, design flyers, create websites, and so much more. The creative possibilities are endless—but so are the risks. While your business may be entirely mobile, you do face risk just like any other business. You have to make sure you're covered if something does happen.
What if a client claims you missed a deadline? What if your work accidentally mimics another copyrighted logo? What if a client sues you for breach of contract? In all of these circumstances, you can be protected with the right business insurance. What business insurance for graphic designers is necessary to protect your business? The first policy you should consider is professional liability insurance.
Professional Liability Insurance for Graphic Designers
Professional liability insurance—also referred to as errors and omissions (E & O Insurance) or professional indemnity insurance in the UK—provides coverage for:
- Alleged negligence/work mistakes
- Missed deadlines and undelivered services
- Breach of nondisclosure
- Copyright infringement
- Claims of slander or libel
- Data breaches
Who needs professional liability insurance? Graphic designers, graphic freelance artists, independent contractors, a designer that specializes in digital image creation, or you own an agency/studio that provides these services you need coverage. Many large clients may also require proof of coverage before signing a contract to work with you. Some states also require graphic designers to obtain coverage.
What Does Professional Liability Cover?
A professional liability insurance policy for graphic designers includes important elements, including:
It is important to define exactly what services you’ll be providing at the beginning of a contract with clients. Projects can often extend beyond what was originally agreed on. For example, after you deliver a completed project to a client, they claim it’s missing important elements. You agree to complete what they’ve requested—but at an additional cost.
But the client argues that you had already agreed on the elements at the beginning of the project and refuses to pay more. You won’t do more work without getting paid, which you calmly communicate to your client. Before things get more contentious, you get your insurance company involved and a lawyer steps in to mitigate the situation. The insurance company pays you the money you were due, settles with the client, and you both move on.
Graphic design projects can often be time-consuming. You’re engaging in work that requires intricate detail and care. But sometimes that means that projects take longer than originally anticipated—especially if your client requests multiple changes through the process. If you’re unable to complete a project on time, your client may sue you for the project delay. They can claim they were unable to launch a product or service due to the delay and demand damages for lost profits. Luckily, professional liability insurance can settle the situation outside of court.
If your designs unintentionally mimic or copy a logo or design that has been copyrighted by another company, they may sue you for copyright infringement. Even worse, your client may also sue you for any litigation they have to face because of your mistake. But if you have professional liability insurance, they can provide you a lawyer and cover legal defense costs as well as settlements.
Unintentional Negligence + Breach of Contract
Professional liability also covers unintentional negligence or a professional mistake. If a client claims that you didn’t complete a significant piece of their website design, they can claim that you were negligent and didn’t complete what you were hired to do. Likewise, if you unintentionally breach your contract with a customer, they can seek damages for lost profits or demand you return the money you were paid for the job.
What is NOT Covered by Graphic Designers Professional Liability Insurance?
There are a few circumstances in which professional liability coverage will not help a graphic designer:
- An intentional breach of contract: If you intentionally walk away from or breach contract with a client, your insurance may not cover monetary damages.
- Cyber liability/data breaches: If you suffer a cyber intrusion or data breach, you need cyber liability insurance. This insurance policy covers credit monitoring for customers, the cost of notifying them, the cost of mitigating media fallout, and sometimes even the cost of a ransom.
- Injuries or property damage: Customer bodily injury or property damage is not covered by this insurance.
Why General Liability Insurance is Necessary
General liability insurance is a great addition to your graphic design insurance package. A general liability policy covers your business in case of third party bodily injury, third party property damage, or advertising injury.
Example: A customer comes to your office to discuss a project they’re considering hiring you to complete. However, as you walk into your conference room, one of your employees spills a cup of hot coffee on your potential client. They are rushed to the hospital for burns on their hands. They sue you to cover their medical bills and lost wages while they’re unable to work. General Liability Insurance will cover those bills so you don’t have to.
Commercial Property Insurance for Graphic Designers
Commercial Property Insurance covers your graphic design office from damage due to fire, natural disasters, theft, or vandalism. It can pay to repair or replace the building, equipment, office supplies, furniture, and important documents.
Is a Home Office Covered?
Do you operate a one-man-show and run your graphic design business from home? Check to see what your homeowners' policy covers for a business being run at home. Sometimes you can add an endorsement to your policy that covers up to $2,500 of business equipment.
Some insurance companies offer home-based business insurance for graphic designers that don’t require office space and work from home. It can afford you more comprehensive business insurance coverage than a homeowners' policy. It is typically a more affordable insurance policy than what is offered to larger companies but comes with smaller limits (i.e. $10,000 property damage coverage).
Consider a Business Owners’ Policy
A business owners’ policy (BOP) is a business insurance package designed for small to medium-sized businesses. It typically includes general liability, business property, and business interruption insurance, and other endorsements unique to your industry. Speak to an agent about this option if you believe it might be a good fit for your graphic design business.
Other Insurance Policies a Graphic Designer Should Consider
What other insurance for graphic designers might be necessary? If you run a small graphic design firm, you want to consider purchasing employee-related coverages.
- Workers' Compensation Insurance: If you hire graphic designers to work for your business, you are required to get workers’ compensation insurance in almost every state. This insurance can help protect your employees by covering their medical expenses and lost wages if they suffer a work-related injury. It also protects your business. How? Any employee who accepts workers' compensation essentially agrees not to sue you for any injury that occurs (unless it’s due to your willful negligence).
- Employment Practices Liability Insurance (EPLI): If an employee accuses you of discrimination, harassment, invasion of privacy, wrongful termination, and more, EPLI can provide you a legal defense and settlement if necessary.
- Employee Dishonesty Coverage: If an employee steals from your business, this policy can compensate for the loss to your business.
How Much Does Graphic Designer Insurance Cost?
CoverWallet offers graphic designer insurance (general liability + professional liability) starting at $89 a month. Thimble offers unique plans for graphic designers that start at $5 per hour. The Hartford states that their liability insurance for graphic designers falls between $500–$1,000 a year. But all of these insurance costs are where insurers start their policies. You will likely pay higher rates for your coverage. Other things that may influence the cost of small business insurance coverage include:
- Choosing higher coverage or policy limits
- The size of your design firm (how many employees you have)
- Whether or not you have a history of claims (more claims increases the insurers' risk)
- The annual revenue of your business
- The professional services you provide
- The location of your business (state/city)
- The type of policies you choose
- The insurance company you choose
Be prepared to speak with an insurance agent about each of these different factors to get accurate insurance quotes.
Get a Free Graphic Designers Insurance Quote
Our goal at CommercialInsurance.Net is to help small businesses—like you—get the insurance coverage your business needs at a price you can afford. If you’re in the market for insurance, feel free to reach out to us with questions. Complete the form at the top of the page for a free quote, or call us at 877-907-5267.
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