Whether you are creating or printing posters, publications, flyers, advertisements, or a website, your graphic design agency or print shop helps your clients build their businesses.
But like other businesses providing professional services, visual media business operations face unique risks that other firms don’t. And if you do not have proper insurance in place to cover mistakes that you or your staff make in your work, you could be leaving yourself on the hook for tens of thousands of dollars in legal and settlement costs.
You may have general liability coverage for your office as part of your business owner’s policy, but that will only cover guests to your property who are injured or whose property is damaged. It won’t cover the work you do for your clients, and that is likely the largest potential liability you have.
As a print or graphic design shop owner, professional liability insurance can save you tens of thousands of dollars if your client blames you for work that affected its business. It can save you even more if you are sued.
Professional liability insurance, also known as errors and omissions insurance, provides coverage for:
- Mistakes and oversights in your work (professional negligence)
- Missed deadlines
- Advertising injuries, such as libel and slander
- Defense costs, settlements and judgments if you are sued over your work
- Inaccurate advice
- Misrepresentation
- Violation of good faith and fair dealing
Examples of covered acts
A marketing agency called Graphic Design Pros creates a marketing mailer announcing a seminar being held by their accounting firm client. The designer includes the information for signing up for the seminar and the client signs off on the mailer without noticing the oversight.
The client notices the mistake after they don’t receive a single response from the mailer after it’s sent out, and sues Graphic Design Pros.
In this case, a professional liability policy could cover the costs of defending your firm, as well as any settlement or judgment.
One important thing to note is that these policies are what’s known as “claims made” policies, which means they will only cover claims that are filed against you after you purchase the policy. This date is known as the retroactive date, or “retro” date.
For example: If you first bought a policy in January 2022 and a client sues you saying that you failed to meet the full terms and conditions of a contract for work you finished for them in August 2022, the policy would cover the claim, but not if the work was rendered in 2020.
Costs
Costs vary for professional liability policies and the premium can depend on a number of factors, such as:
- Policy terms
- The size of your company (more workers means more potential liability)
- The kind of work your firm does
- Your firm’s claims history or history of lawsuits (if any)
- Annual revenues
If your firm is on the smaller end with one or two designers, you’ll be typically paying the minimum rate, which can be about $500 to $1,000 per employee. Well worth it as litigious actions are on the rise.
The takeaway
While the work of a printer or graphic design firm may seem innocuous enough, one mistake that causes one of your clients to lose customers, prospects, revenues, and/or potential sales can lead to a lawsuit, which can be costly and stressful.
If you have to defend against the case yourself and pay for it out of pocket, even if you come out victorious, you’ll still be saddled with tens of thousands of dollars in legal fees, or more. Having an insurer in your court with its own lawyers defending you is priceless.
VMA has been helping print, packaging, label shops and design, creative, marketing agencies since 1936 to secure the best insurance to protect their businesses. As experts in the industry, we are exteremely qualified to your business. Make sure you are protected by contacting Shannon Wolford, VMA’s Director of Membership and Sales at 415-710-0568 or shannon@visualmediaalliance.org today!