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Professional Indemnity Insurance for Sign Writers

Written by

Shaun McGowan

As a Sign Writer the work you produce is always on display. Clients may invest substantial amounts of money in highly visible promotional materials, which can have a significant impact on their local reputation and the amount of passing business they attract.

In addition to creating signs in a variety of materials and formats (including murals, 2d and 3 lettering and graphics), you may be involved in the design, layout and wording of the signage, and you may be asked to advise on the most appropriate materials for the environment. You may also be required to prepare surfaces and manage installation of the signs, or to oversee the work of other contractors.

As the provider of a professional service your clients have the right to rely on your advice in your areas of expertise, such as the suitability of particular materials for the conditions at the proposed signage site. They can also expect you to meet deadlines and complete projects to a high standard. If you make an error or fail to deliver work as expected, and the client loses money or business or incurs extra costs as a result, they can take legal action against you to recover their losses. They could claim that:

  • You missed an important deadline
  • You made mistakes in the signage
  • You infringed someone else’s copyright
  • You breached their confidentiality

Even if you follow the instructions or guidelines provided by your client you could still be at risk of a negligence claim.

Why do Sign Writers need professional indemnity insurance?

If you are operating as a professional Sign Writer, especially if you are employing other people to work with you, it’s really important that you to protect yourself with professional indemnity insurance (PII). Here are some the reasons why:

  • If you make an error in the wording or design of a sign and this is not identified before production, the sign (in some cases a large number of signs) may have to be remade. Depending on the materials used and whether the signs have been installed, this could be an extremely costly exercise.
  • If you are involved in the design of the signs, there is always a risk that someone will claim your work is an infringement of their copyright. It is extremely hard to make an exhaustive check and be sure that no one else has used a similar style or design. Intellectual property infringement claims, whether or not they are substantiated, can be very expensive to defend.
  • You will often be working to deadlines, sometimes as part of a larger project schedule. If you do not deliver your work on time the knock-on effect on could be severe, particularly if the signage relates to a specific, time-sensitive promotion. If this happens your client could miss out on valuable promotional opportunities.
  • If one of your employees makes a mistake, whether a copyright infringement or an innocent error like accidentally emailing details of a client’s marketing strategy to the wrong person, you could be held responsible for their error - and any financial consequences it has for your client.
  • If you are responsible for choosing and managing the work of other contractors like printers you could be held vicariously liable for any errors they make, or for their failure to deliver on time or to the expected standard.
  • If you provide inappropriate advice on which materials to use for a sign, and the product degrades too quickly or turns out to be unsuitable for the environment, the client could seek compensation for any additional costs of remaking the sign in a more durable format.
  • You could lose your personal assets, as well as your business and reputation, if a client were to make a claim against you for professional negligence.

What does professional indemnity insurance cover?

You probably already have public liability insurance in place to protect you if someone has an accident on your premises, or for any physical damage you may cause to another person or their property (for example if a sign you install should fall onto a person or vehicle). But your public liability insurance won’t cover you if you or one of your employees does something that causes a client to suffer a financial loss. For that, you need professional indemnity insurance.

When you take out a professional indemnity policy you protect yourself against the legal costs of defending your business against a negligence or copyright infringement claim (even if the claim is unfounded) and for any damages that are awarded against you if a negligence claim is upheld (up to the limit in your policy).

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How much is professional indemnity insurance for Sign Writers?

The amount you pay for your professional indemnity insurance will depend on a number of factors, including:

  • How much cover you wish to take out
  • The turnover of your business
  • The type of services you offer
  • Where you work (stamp duty levels vary in different states)

There are some options you may be able to add to your policy for additional protection, such as automatic reinstatement of cover after a claim, retroactive protection and run-off cover. These features can increase the cost of your insurance.

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Professional indemnity insurance case study

A small Sign Writing studio was engaged to create branding, safety and informational signage for a new cold storage warehouse. They were asked to provide advice on the materials for the signage and to handle all aspects of the design and production.

The warehouse was a very large facility and more than 300 customised signs of varying sizes were created for the client. The Sign Writer advised that the signs should be produced on a hardwearing plastic that would not be impacted by the extreme temperatures in parts of the facility. Due to the large scale and tight deadlines the Sign Writer enlisted another contractor to help fulfil the order. He was appointed as project manager with responsibility for selecting the materials and overseeing the production of the all the signs.

Only a few months after the warehouse opened, many of the signs began to shatter. It was revealed that the other contractor had used substandard materials that were not able to withstand the cold temperatures. A large number of signs had to be removed, remade and reinstalled, at considerable cost. The client filed a negligence claim against the Sign Writer for failing to ensure the signs created by the other contractor were of a high enough standard.

The Sign Writer incurred legal costs of $26,000 defending the claim, and was required to pay $20,000 in damages for negligence in his supervisory duties. The $38,000 cost of replacing all the substandard signs was recovered from the subcontractor in separate legal proceedings. The Sign Writer paid an excess of just $[xxx] on his professional indemnity insurance claim, which covered all his legal costs.

List of Sign Writing services that need professional indemnity insurance

To protect both your business reputation and your personal and professional assets, you need adequate professional indemnity insurance if you are offering any of the following Sign Writing services:

  • 3D lettering
  • 3D signage
  • Advertising signs
  • Awnings
  • Banners
  • Billboards
  • Business signage
  • Concept design
  • Customised signage
  • Digital printing
  • Factory signage
  • Light boxes
  • Logo design
  • Material selection
  • Neon signage
  • Project management
  • Promotional banners and signs
  • Self adhesive lettering
  • Shop front signage
  • Signage advice
  • Sign installation
  • Sign production
  • Stickers and decals
  • Vehicle signs and wrapping
  • Window film

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About the Author

Shaun McGowan from money.com.au

Shaun

McGowan

Shaun McGowan

Shaun is the founder of Money.com.au and is determined to help people pay as little as possible for financial products. Through education and building world class technology. Previously Shaun co-founded CarLoans.com.au and Lend.

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