I am a free lance webdesigner working from home. need guidance on what insurance coverage i need to get? would professional indemnity insurance be needed? in addition, do i require personal protection and public liability insurance too?
Public liability if you have clients visit your home.
Professional Indemnity will provide some cover and some peace of mind, but check the policy wording as many of them are virtually useless. Also consider the types of projects you work on - if you do simple portfolio sites, what exactly is a client going to realistically sue you for? Is it worth paying the premiums and excess? If however you work on mission critical ecommerce sites, then yes, PI insurance is probably a must - but of course, expect to pay significantly higher premiums and excess as most PI policies won’t cover such uses.
Also, PI insurance usually only covers you when the claim occurs - so if you are sued today for an event that occurred 4 years ago, it only matters if you have active PI insurance today - the fact that you had PI insurance 4 years ago is meaningless. SO even if you retire, you will still want to keep a PI policy in place (typically, you’ll get a reduced rate though).
ok Shadowbox that was very helpfull of you. you have got my mind reeling now. i develop besic websites but i recently expanded my services and now i also work on ecoomerce too. so that means like you said, its a must to get my Rofessional indemnity insurance. the other point is, i work from home but i provide services completely online. no clients visit me at my residence, so now would i need public liability insurance as well? its reassuring that after retirement the premiums would decrease. im glad. Thanks:)
Working on ecommerce sites doesn’t mean you’ll suddenly become liable for big litigation - when I said ‘mission critical’, I’m talking about sites that can loose tens of £1000s for every hour they are down (and that’s most likely a hosting issue). As a web developer, consider exactly what can go wrong with the actual services you provide and what it might cost your client if it did occur. Make sure you have a water tight contract that covers liability and indemnity, and make sure your client tests and signs off the site before going live. If there’s a bug further down the line, you’ll just fix it and that’s that. People don’t go round suing developers willy-nilly. Most issues get solved amicably.
And yes, public liability not needed if clients never visit.
Great so that means im in safe water:) thanks again. Well i shall get back to you if i got any further queries. you have been much kind:)
I’m not sure that indemnity insurance is completely useless - at least not in all jurisdisctions. You are basically getting the lawyers of your insurance to negotiate on your behalf. For example many years back a contractor of mine built a data collection tool, in which he accidentally put a tinyint as the auto-increment. This then went onto a careers event where it collected 127 entries. Of course the client was pissed off and didn’t pay their invoice and they had to go back to schools to get the names and details of attendees as well.
However:
- had I’ve been sued I would have had a reasonable chance to only be partially liable because a) the client never looked at the backend during the event nor b) did they call me to check, even though I made myself explicitly available
- the insurance would have negotiated a settlement without inflated damages
- they would probably asked my sub contractor for money because his contract stated to have insurance as well.
So having their lawyers on your side is quite useful and a good deterrent.
HTH, Jochen
Would you guys by any chance know of some reliable and affordable insurer? it world be great if you have had a personal experience with them,. maybe been insured by the same so as to know they are credible. Also, it would be great if i could have a slight rough estimate of how much should i be expecting an insurer to quote me for PI?
I did not say PI Insurance is completely useless. I said assess your personal situation to calculate the likelihood of being sued and if so, how much liability you could get sued for. Then check your policy wording to ensure your policy actually covers you for the reasons you wanted the policy in the first place - because in that respect, some PI policies are indeed virtually useless. For example, many specifically don’t cover negligence.
In your situation, you deal with 3rd party contractors so you may feel having a PI policy would be more prudent.
As for being a deterrent to being sued, I’m not sure about that. Knowing the other party is fully insured for the costs of litigation simply means you are more likely to get paid when you win the case.
From a basic websites the chances of being sued and pretty unlikely.
I would not know where to begin with insurance. Truth be told having a bulletproof contract will reduce head aches and future worries. Insurance policies are only really needed if you are likely to be sued or likely to make a claim because of loss of income. I am pretty much covered on the legal side of things, and “touch wood” being sued is the least of my worries. I mostly worry about keeping clients happy and returning for more business. 
What do you do sega? why you so worried of not being able to satisfy your clients? Your post makes me wonder about another point, if incase the company we work for that is insuring us gets sued for any obvious reasons, what happens to the employees in that case? are they liable for anything?
@Ann.j;
I create websites.
At times clients might ask for a website with functionality to launch nuclear missiles into space, or more likely include things onto the website which was not stipulated in the contract. This issue happens VERY often, I’d hate to say how many times this has happened to be.
Including them will only fuel more unruly demands, you then have to set people straight and let them know that this was not included. Considering our work is based on time, freebies are very hard to justify. You’d end up working all day and in the end barely afford to keep yourself alive.
From what I know people would ‘sue’ other’s who aren’t happy with them, more specifically being in ‘breach of contract’. Employees are only liable if they are being sued for ‘criminal’ activity. For instance, if a company could not sue me personally for not providing the expected service, or selling sub-standard. I personally could only be sued for criminal activity.
Edit: We have to keep clients happy whilst keeping our business profitable. This is my main concern. Many people who run a business have this as their main concern too.
So if you have already developed a website for the client, and delivered it, but later after the delivery sometime, the client uses the website for wrongful purposes or questionable activities such as the missile part you mentioned. what happens to you then?
Always retain all documentation and written communication between you and your clients. You can then prove that you were unaware of the intended illegal use of the site. But also use common sense when dealing with clients - you can normally spot the dodgy ones during initial sales meetings, so if you begin to feel uncomfortable, walk away.
And ensure your contract contains appropriate indemnity and liability clauses to help protect you against civil issues that you may become drawn into due to your client’s activities via the site (e.g. copyright infringement etc). But you should hopefully not have any issues with these things, because before using, say, stock images in the site design, you should ensure the client has obtained a license to use them on their site (i.e. ask them to forward details of the license, or obtain the images for them on their behalf).
I have many clients ask for questionable activity, some this activity is not outright illegal other times it’s unethical. In either case unethical people stick together and it’s best to aim for decent clients. I once had a client who asked me to do something highly unethical. Eventually this person started getting confrontational so I decided to turn them down and did not even bother with a meeting.
A lot of what we do is spotting the right character for our job. Below are some common characteristics I’ve found over the years of dodgy people:
- Is confrontational in the early stages
- Feels work to be done for free, for the honor of working with them initially
- Want you to sign a non disclaimer agreement. (for their security) I would like to add here, that I never sign a non disclosure agreement (NDA). If they feel their company is top CIA material, then maybe the CIA should design their website for them.
- Avoid paying any deposits or signing contracts
- Prefer to get you to sign on their terms, rather than they sign on your terms
- Demand endless meetings prior to agreeing
- Too much talk in the early stages, and show themselves as demanding clients before they’ve even turned into clients
Not sure what other’s thing of my list, but it’s pretty bulletproof in eliminating bad clients.
I can spot a bad client from a mile away, occasionally I take them on, especially if they are related to me or friends, but I set them straight before things get out of hand. Time is chargeable and we need to account for this. Always use similarities to avoid confrontation with clients e.g. when you buy a car, when you bring a plumber, would you not expect to have to pay extra for the extra work needed? x and y are not included because these take this much time and amount charged is based on the time it would take to complete. Once they understand that you’re not as ‘simple’ as you look people quickly change their tune, and start to treat your business like a business.
This thread was an interesting read. I thought some of the best advice was contained in Sega’s post from June 11th where he stated a well written contract is far more important than any insurance.
I heartily agree with this advice!
Thank you shadowbox. shows you are very good at what you do:) i am wondering though, that once you have delivered the site, you relationship, your contract, all your dealings end there. so you should really be liable even if they do indulge into wrongful acts, as long as like you said, we can provide proof that we are no longer dealing with that client as of this this date
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