Professional Indemnity Insurance for Graphic Designers

If you are offering your services as a Graphic Designer, especially if you are running a design studio or employing other people, it’s extremely important that you have professional indemnity insurance (PII). Here are some the reasons:

• Many businesses, especially public sector organisations, won’t engage your services unless you have adequate insurance to protect their business if you make a mistake that costs them money.
• There is always a risk that someone will claim your original work is an infringement of their copyright. It is almost impossible to make an exhaustive check and be sure that no one has ever used a similar style or design. Intellectual property infringement claims, whether founded or not, can be extremely costly to defend.
• You will usually be working to deadlines, often as part of a larger project schedule. If you fail to deliver on time the knock-on effect on could be severe and your client could incur substantial extra costs – which they may seek to recover from you.
• If one of your employees makes a mistake, from a copyright infringement to an innocent error like emailing a document to the wrong client, you could be held personally for the outcome.
• If you are responsible for selecting, scheduling and supervising other contractors such as printers, you could be held liable for their failure to deliver on time or to the expected standard.
• Your personal assets, as well as your business and reputation, are at risk if a client sues you for professional negligence.

A freelance Graphic Designer was engaged by an SME to completely overhaul their brand, including the design of a new logo and the creation of a style guide setting out colours, fonts and usage guidelines. Once the new brand was finalised the client commissioned a new website and a suite of printed marketing collateral, including brochures, letterhead and business cards.

Six months later a rival company filed an intellectual property infringement suit against the client, claiming that the new brand was too similar to their own and was a breach of their copyright. The infringement was upheld and the client had to take down their website and stop using their printed materials.

The client filed a negligence claim against the Graphic Designer for the cost of developing a new brand, redesigning the website and reprinting all their marketing materials. They also claimed for lost business during the period when the website was offline, and for the fines they had to pay to the rival company for breach of copyright.

Damages of $637,000 were awarded against the Graphic Designer. His professional indemnity insurance covered these plus his legal costs of almost $40,000. The excess he paid on the claim was just $[xxx].