7 Things to Look for in a Graphic Designer Insurance Policy
When you start looking for graphic designer insurance, it's easy to be overwhelmed with all the insurance jargon and types of coverage. In this article, we'll go over two basics policies:
- General Liability Insurance.
- Errors and Omissions Insurance.
These aren't the only designer insurance policies you may want to consider — they're just two of the most common. Even if your business is only a small, freelancing operation, these policies can offer important coverage against expensive lawsuits. Here's how they work.
Understanding General Liability and Errors and Omissions Insurance for Graphic Designers
Maybe you've heard General Liability Insurance referred to as "slip-and-fall insurance." Or maybe you know that E&O covers your "malpractice" liabilities. If you don't have any clue how these coverages work, don't worry. Here's a quick summary:
- General Liability Insurance may pay for lawsuits when third parties sue you over bodily injuries, reputational damage, and property damage. For instance, if a deliveryman trips and falls on your property, GL can help cover your lawsuit costs (and may pay emergency medical bills).
- Errors and Omissions Insurance may cover many of your professional liabilities. If a client claims you didn't do your job properly, botched a design, missed a deadline, or made another mistake, Errors and Omissions Insurance may pay for your lawsuit costs. This insurance can also help cover lawsuits over libel, slander, accidental copyright infringement, and other media-specific liabilities.
7 Things to Look for In Your Designers Insurance
Now that we've got the basics down, let's talk about what graphic designers need to look for when they're choosing between policies. At Insureon, we're used to reading over insurance mumbo jumbo, but we recognize that the language in a policy can get confusing in a hurry. Here are key parts of your policy (and what they mean in plain English):
- "Right and duty to defend" language. These words should be music to your risk management ears. In short, your insurer can (has the right) and is obligated (has the duty) to defend you from the lawsuits covered by your policy. If your policy says the insurer only has the right, but not the duty, that means they aren't obligated to defend you. And that's no good.
- "Claims-made" vs. "occurrence" language. Generally speaking, GL is occurrence coverage. That means your policy covers claims that happened while you had the policy. Even if you cancel your policy and someone later sues you over an accident that happened while you had GL, your policy should still cover the claim. On the other hand, E&O is usually a claims-made coverage. It only covers claims that happen while you have a policy in effect. If you cancel your policy, you'll lose coverage for any lawsuits, even ones that arise from mistakes you made while you had coverage.
- Aggregate and occurrence limits. The aggregate limit is the total cap your policy has for claims during that year. Occurrence limit is the limit for each claim you file. For instance, you may have a total aggregate limit of $1 million, but a per occurrence limit of $500,000.
- Deductible. Your deductible is the amount you pay before your insurance will cover a claim. A $1-million GL policy might have a deductible of $1,000, which means you'll have to pay the first $1,000 of a lawsuit before GL kicks in.
- Premium. The annual payment you have to pay for insurance coverage. Some policies have options to allow you to split up your payment throughout the year, but typically small businesses pay this cost upfront.
- Duties in the event of an occurrence, event, claim, or suit. An insurance policy is a contract, which means that the insurance company may ask things of you. You'll commonly be asked to inform your insurer about any incidents, claims, injuries, or lawsuits as soon as you can and forward any relevant details and legal documents.
- Exclusions. These are the things not covered by your policy. For instance, while GL covers many injury lawsuits, it doesn't cover employee lawsuits. Similarly, your E&O won't cover mistakes you knowingly made. Make sure to read your exclusions carefully.
Why is it important to know these features? As in graphic design, the details matter in insurance. Small differences in your policy could mean big differences in your risk coverage.