Ever Had a Client Expect You to Take Out an Insurance Policy?

Got an interesting though somewhat disturbing email a few days ago from a commercial freelancer. She wrote:

I wanted to get in touch because I have a concern that’s starting to affect my commercial writing business, and others will likely be coming up against this more frequently as well. In the past six weeks, I have been asked to sign contracts with three corporations. One company wanted me to obtain a General Liability policy in the amount of $1 million (has absolutely no relevance to freelance writing); the other two companies are insisting I obtain Errors & Omissions insurance, which also is irrelevant.

Errors & Omissions insurance is professional liability insurance for mistakes or negligence. One financial Web site said: “It protects a company against claims for financial injury that allege a product failed or the company failed to perform services, causing a loss of use of tangible or intangible property to others.”

I sent the following reply to my contact at one of the companies:

“Here’s the problem: If I/we as freelance writers are writing about a company’s products, the information provided to us comes from the company or company sources. The company is responsible for the accuracy of this information and having their legal departments sign off on the final document. With words, you could never gauge how someone would be making a purchasing decision and how your choice of language influenced that. The only thing you can gauge is whether the facts are correct or not—statistics and so on. And it is the company’s responsibility to check their facts and give a final okay.

“Also, the company always touches the piece last, and unlike an actual product such as a computer, medical device, electric fan or something else that could have flaws due to its manufacture, words can be changed and altered by the client right up to the last moment–or continuously, if the words are in an electronic format. Therefore, the final copy or ‘product’ is never static and the product the original writer produces can and often is very different from the final product the public sees.”

Her reply was that she completely agreed, but her hands were tied. Either I obtain the insurance or I cannot work for that particular company. This is a company I do quite a bit of work for, so I am probably going to cave in and purchase this insurance; she thought it could cost up to $1,000 per year.

I feel like this is a big issue that’s only going to get bigger, and this change is happening fast. I feel like we need to educate corporations about the fact these types of insurance have no relevance to what we do. I thought this might be helpful for other freelancers to know that this is happening and perhaps we can work together to find ways to deal with this (or get around it).

Other actions I’ve been asked to take within the past year (by only large corporations, not smaller businesses) that I have never been asked to do in the 12 years prior:

1. Change from a sole proprietorship to an LLC
2. Obtain a Dun and Bradstreet number
3. Take steps towards becoming a registered woman-owned business
4. Provide information about my personal health insurance coverage and homeowner’s insurance

Companies are trying to cover themselves, but need to be educated about what we do. Any advice freelancers can share with each other regarding this would help us all.


PB: Okay, so all of this is just bizarre to me, but if this person’s encountered it multiple times from different companies, something’s going on. I’ve never gotten hit with any of these demands in 15 years, though in the past 4-5, I haven’t been working (by choice) with many large companies. And in 15+ years in the business, I’ve never ever heard of any copywriter being hit with a lawsuit over copy they wrote, nor even heard of someone who knew a copywriter in that situation. We’re talking about Powerball lottery odds here.

Given the fundamental irrelevance of this concern on the part of these companies to what freelance commercial writers do, and the ensuing demands being made of this particular copywriter (and others, presumably), in my humble opinion, it has all the earmarks of corporate legal departments working overtime to come up with anything that could possibly go wrong. Pretty much the raison d’etre of the legal profession anyway.

But why now all of a sudden? Any thoughts?

Have any of you come across any of these demands from your bigger clients?

If so, how did they explain their thinking on it?

And if so, how did you deal with it?

Any other input based on specific knowledge of industry trends?

33 replies
  1. Alan Stamm
    Alan Stamm says:

    Who knew? I sure didn’t . . . but just learned that Peter’s correspondent has company.

    Social media communications adviser Chris Brogan posted this May ’08 heads-up from tech writer Lynette Young: “A few contacts and I have been getting requests for freelance writing and writing for pay on company blogs, but we require errors/omissions insurance.” Brogan, also surprised and also uninsured, invited discussion — which continued through last month.

    Sounding like Peter, Geoff Livingston (CEO of a Wash., D.C., comms agency) yelped: “Just a frightening concept. It’s only matter of time before the lawyers sink their teeth into this!” Another echo: “I am perplexed about why a writer would need errors & omissions insurance if they are writing about a company, the information provided to them comes from the company and the company is responsible for the accuracy of their information.”

    Two other worthy excerpts follow briefly, starting with one from Toronto PR agency senior consultant Dave Fleet:

    “I’ve been on the other end of this in the past, when I’ve been the person in an organization setting up contracts with individuals. We went back to our purchasing unit and suggested to them that this insurance wasn’t necessary for the task in question. After some negotiation internally, we signed the contract.

    “Suggestion: when possible, build a relationship with the people you’re dealing with. Then, when an issue like this comes up, you can approach them and negotiate it in good faith.”

    Second snippet is from David Fisher:

    “Wow, this is shocking and a clear sign of how the insurance and litigation society we have is gripping on us. . . . I wonder if in 20 years if sadly this will be commonplace and another near-ubiquitous insurance that we are forced and scared into purchasing just to cover ‘what if’ situations. This is a dangerous rabbit hole that I hope the lawyers and insurance agents don’t drag us down.”

    No consensus on whether to buy policy or how to push back.

  2. Jill Gormley
    Jill Gormley says:

    I haven’t encountered this, but my initial reaction is not to buy the insurance, and pass on the project if insurance is a prerequisite. My issue is not so much the cost of the policy as the fact that once you’re insured you automatically become a “deep pocket.” This is pure speculation, but I’m guessing at least part of the reason we don’t hear of copywriters getting sued is because it never occurs to plaintiff’s attorneys that a freelance copywriter might actually have resources to pay a judgment. They probably don’t read Peter’s books.
    Don’t misunderstand, I can’t imagine how a copywriter could eventually be held liable since, as others have pointed out, the client provides the source material, approves everything and can even change our product without our knowledge or approval. But there are excellent business reasons for insurers to settle rather than litigate–even if a win is as sure as anything can be–and so an enterprising plaintiff attorney might include an insured writer in a suit, hoping for a contribution from the insurer. Or our clients (more likely, our client’s insurer) might bring the insured writer in as co-defendant, hoping the writer’s insurer will contribute to any settlement the client may have to pay.
    If most of the people I work with start demanding I be insured I’ll have to think about it, I guess…If that happens, I may have to make my relationships with clients more formal, with a more comprehensive contract including an indemnity provision rather than the 1.5 page letter agreement I use now. Sigh. I started in this business to get away from this kind of stuff.

  3. Ellen
    Ellen says:

    I’ve had general liability insurance for several years, due to an initial request by a large corporation and it has been requested by other large clients since then. I’ve been asked to get errors and omissions but the contract actually said that was only necessary if I worked on their premises so I got around it as I rarely go on-site and then only for meetings not to do actual work. The size of the contracts made it worthwhile to get the insurance but still… I even asked an insurance broker about the E & O insurance and they said “What do you do? Why would you need this? I wouldn’t even know how to quote you.”

  4. Michael Stelzner
    Michael Stelzner says:

    Peter – Most large firms want at least a 1 million dollar liability policy to protect you if you cause damage while on their property. I have a policy with The Hartford and pay $707 per year. I do not have E&O and have never had anyone ask for it. If the client has a big upside, get the insurance. – Mike

  5. Matt Tuley
    Matt Tuley says:

    Huh. I’ve not been asked to get insurance, either. Not sure how I’d handle it. If a corporation says we have to get insurance to work with them, could we bill them for the cost of the premium? Or raise our rate to eventually recoup the cost? At worst, the higher rate will drive them away–but we weren’t going to be able to work with them anyway, right?

  6. Rick Middleton
    Rick Middleton says:

    I’ve heard of all these things in recent years.

    I’ve been freelancing for several years, often for hospitals. Last year, for the first time, a new hospital client’s contract called for a $1 million liability coverage policy. My guess is that they lump all service providers into one bucket — from food service to janitorial to IT consultants to ad agencies to copywriters. It makes sense for many of these service providers to have such insurance, and zero sense for others, but not everything in life makes sense.

    I called a local insurance guy, we discussed this requirement, and I ended up buying the $1 million policy. It is costing me very little: $167.00 per year. The insurance man evaluated my business model and realized that my liability risk is next to zero, and thus he was able to attach such a cheap premium to the policy.

    Also last year, I became an LLC, which my SCORE counselor refers to as a “no-brainer.” It costs me $50 per year and may protect me in many ways. If you look around you see that companies large and small are LLCs, so the consensus seems to be that it makes sense to establish this structure.

    As for the DUNS number and woman-owned business status, those would make sense for anyone trying to land work in the public/government sectors. The DUNS number is essential, while the “female-owned” label is an advantage in many bid situations.

  7. peter
    peter says:

    Thanks to all for weighing in – learn something new every day. I really has been a long time since I’ve worked for a big company directly, as I find I enjoy the work with smaller firms far more and the money is just as good. But apparently, it’s more common than we might have imagined.

    Alan, thanks much for the research results there. Good stuff. And Mike, can’t believe you really have to have $700 policy! Strikes me as ridiculous, but such are the times we live in, I suppose. It really feels as if the inmates are running the asylum.

    And thanks Jill, Ellen, Matt and Rick for weighing in. Rick, sounds like you have the best of both worlds – you’ve covered but pretty inexpensively.


  8. Paul Chimera
    Paul Chimera says:


    My suggestion: get a meeting of some of these company officials, and some freelance copywriters in this woman’s region — and discuss this. Have an intellectual property attorney there; the corporate counsel; someone from a key marketing association, etc.

    It sounds preposterous on its face. And I agree with you, Peter, that it has the earmarks of attorneys looking to justify their existence.

    But then the world is changing oh so rapidly. Who knows if we’re not entering a whole new, somewhat crazy, hyper-analyzed, hyper-sensitive era?

    I think this issue could be the stuff of which various regional conferences are made. Because it portends some major shifting in thinking and practice — not to mention writers’ budgets.

    Paul Chimera, Buffalo, New York

  9. Katherine Swarts
    Katherine Swarts says:

    I agree that requiring liability insurance for everyone involved in any kind of writing is insane and may just encourage people to sue because insurance companies settle faster and higher than individuals. I’ve never encountered this (nor the request to change to an LLC, nor requests for information on already-owned insurance) personally, but then the majority of my clients to date have been small or medium-sized companies, rather than huge corporations.

    I have, however, encountered corporation databases that require a D&B number before one can register as a potential “supplier” (many corporations hire their majority of independent-contractors-of-all-stripes from such databases, and often the initial request for registration has little to do with whether or not there is much immediate hope of an assignment). I even had one refuse to accept my registration until I got an Employer Identification Number, and never mind that I have never had any employees, have no plans to hire any in the foreseeable future, and continue to pay taxes exclusively under my Social Security number!

    Obtaining certification as a woman-owned/minority-owned/veteran-owned/etc. business is a different matter altogether. I’d advise anyone eligible for such certification to get it from as many agencies/governments as possible: it doesn’t cost any more than membership in any professional organization (with some city and state governments, it’s free); and it provides a leg up in being considered for many corporation opportunities, along with access to a variety of resources and networking contracts.

  10. Jon
    Jon says:

    Hey Peter,
    Interesting discussion. I was actually asked to get liability insurance last year while doing some work for the local school district. This was work that was not done on their premises, save for a couple meetings, and nowhere near a school. It would have cost me more than $800 for the policy, which for this job did not make sense at all. Luckily, it turned out that the school district basically has a template contract for all contractors, whether they’re carpenters or freelance writers, so they were able to exempt me from the insurance requirement. But still, it got me thinking and had me a little worried that I was going to be missing out on some much-needed dough . . .

  11. Star
    Star says:

    This subject is not new–it’s been around since forever. Indemnity clauses are part of this. I won’t sign those, although some writers will with some tweaking (such as “to the best of my knowledge” this doesn’t violate anyone’s sensibilities or anyone’s laws throughout the universe, blah blah.” I like the universe part a lot. The E & O is hard to find and get–and it is expensive. Usually the writer is put out front this way because the writer does not have money–companies will TELL you this is why they do it–so people won’t bother to sue. But anyone can sue for anything. I will be damned if I pay a bill because some editor at Time Inc. or someplace changed my copy but did not take my byline off. As for clauses that say the writer has to be convicted of something to pay–who pays for the process up to that point? They never answer that!

    On this general subject, one blogging co. I know of requires a criminal background check. I want one on them!

  12. Barbara Payne
    Barbara Payne says:

    My experience with this was back in 2003–my first full year in business. I had written a long journalistic piece for a major industry trade paper. Price and conditions had been agreed on. AFTER it was published and I sent my bill, the contact person suddenly introduced and demanded that I sign a clause indemnifying the paper for everything and agreeing to pay any and all legal expenses that might arise as a result of my writing.

    Given they did all the fact checking and edited the final piece, this struck me as ludicrous. I refused. He refused to pay me (it was a decent sum). I ended up going over his head to the publisher of the paper, who did then pay me. Who wants to work for a place like that?

    In another case, I sent my simple 1.5 page (Peter-Bowerman inspired) confirmation of assignment to my client contact at a giant corporation and she wrote back and said, no way are we doing this. We’re just going to agree on fees and terms in our emails and keep the lawyers out of it. What a breath of fresh air.

    Thanks for the heads-up on this. What a pain.

  13. Michael Scully
    Michael Scully says:

    “On this general subject, one blogging co. I know of requires a criminal background check. I want one on them!”


  14. Michael Scully
    Michael Scully says:

    A multi-million corporation asking a writer to indemnify THEM (the corporation) is beyond absurd.

    But I’m wondering why Barbara Payne’s client objected to a 1.5 confirmation letter. It sounds like you WERE “leaving the lawyers out of it.”

  15. Devon Ellington
    Devon Ellington says:

    I’d say “no” and move on.

    If we let the corporations dictate and micromanage our business, then we might as well be on their regular payroll with them providing ALL benefits.

    The reason we FREE-lance is to remain FREE of corporate interference.

    I think the negotiation and meeting ideas to give them an idea of what we do is a positive, potential solution, but, frankly, I can’t be bothered with that kind of corporate crap. That’s why I’m not a cubicle slave in the first place.

    There are PLENTY of clients that pay well and deal reasonably without feeding this type of insane machinery.

    I realize it’s an individual decision and I appreciate the heads up, so if anyone approaches me with it, I can tell them to take a long walk off a short pier.

    Good luck, whatever you decide.

  16. peter
    peter says:

    So, Devon, tell us how you really feel…;) Seriously, love the unambiguous stand. A true freelancer has spoken… And I’m guessing Barbara was referring to a “bid letter” (simple non-contract contract). As for the client saying no way, if you trust the client and have worked with them before, no problem. But, if it’s a new one, for them to refuse to deal with a simple outlining of parameters would raise a red flag for me…


  17. Starr
    Starr says:

    Frankly, I’m appalled. I’m totally new to freelancing, but as someone else mentioned, this is the sort of thing we are escaping from! I am fresh out of the corporate atmosphere (downsized) and I am actually sickened (but not surprised) to hear of a request like this. I don’t have experience to say what I would do, but I hope it would be a resounding NO. Surely there is enough work out there to go elsewhere.

    It reminds me of when my husband (now ex) and I bought a house. We sat in a conference room with a lawyer, a bank official and a couple of witnesses. We signed contract after contract. We produced everything but our firstborn to prove that we were who we said we were. Finally, a document was presented for us to sign that basically said, if there were any omissions or errors in all the paperwork we had just been through, the bank would not be responsible…

    My then-husband balked. “You mean to tell me,” he said, “that I’ve complied with your every wish, proven my existence on this earth and practically signed all these contracts in blood – and now you say you can’t be responsible if you’ve made a mistake?”

    Dead silence.

    For several minutes.

    Finally, looking the banker in the eye, ex-hubs asked, “Where do I get a job like that?”

    It was one of his finer moments.

    We signed, of course. (And I still have the house!) But what a crock. I’ll never forget it and this situation reminds me of it all over again. I hope I can avoid this situation!!

    (I see there is another “Star” here. I’m the other one…)

  18. Michelle
    Michelle says:

    I’ve never been asked to get insurance…but I’m an S Corp, have a D&B number and am a certified woman-owned business. I plan to let my national certification as a woman-owned biz lapse on 3/31 since it has not helped me in any situation whatsoever. I’ve talked to a number of other women who are doing the same (designers, consultants, small service providers like freelancers).

    I wouldn’t recommend certification unless you plan to do a lot of work with the government. But if you’re a one-person biz, don’t plan on seeing a lot of bid opportunities coming up. The reason a number of small service providers are not re-certifying is because most of the contracts are for products like a/c, large equipment, etc. The certification requires you to go through supplier diversity, but let’s face it — A lot of jobs under $25,000 don’t even hit the SD desk, so they’re not even aware of them and can’t help us much.

    Personally, I skip SD and go straight to the marcom depts. When they need a good writer, they hire directly.

  19. An Kestens
    An Kestens says:

    Hello Peter,

    A collegue freelance copywriter told me an interesting discussion was going on here on insurances for copywriters. I just started as a freelance copywriter but worked for several years at an international major insurance broker. Not as a senior insurance specialist (they wanted to make me one, that’s why I got out and finally found the courage to return to my first love: writing), but I know a lot about it. I am not from the US, but from Belgium. Therefore sorry if my English is not 100% + with my explication also check US laws (Theory of what the different coverages mean, should be correct. Actual practice maybe not.)

    I’ll try to explain what a general and professional liability cover, and tell you how I for the moment solved the problem.

    A General liability insurance covers your business for damage you do to third parties (personal injury, material and immaterial dammage). It concerns damage which is not linked to your business/ your profession (non-contractual damage). Example: you visit a client and break by accident a very expensive chinese vase/ statue. This will only be covered by your public liability policy (a general liability policy includes public and product liability – I explain later). Other example: a client comes to your house and gets injured because he trips over the carpet, this will also be covered by your public liability policy

    Difference between public and product liability:
    Public liability policy covers you for damage your business does – the action itself. Product liability is for the damage done by the product you delivered (in Belgium it is called “liability after delivery”). For example: A machine you deliver causes an electric breakdown in a factory and therefor they cannot produce for a day (material and immaterial damage). If you installed the machine correctly and the electric breakdown was caused because of the malfunctioning of a specific part in the machine that was not made by your company your product liability policy will cover this damage. If the electric breakdown was caused by a professional mistake (something you should have known, eg. you swithed 2 wires or something)you will need a professional liability coverage. A product liability policy will not cover this, product liability only covers non-contractual damage. If you make a mistake on something you should have know because of your profession it is contractual damage. Your contract with your client states you will do your job correct and you are supposed to know your business.

    Professional liability: protects your business by damage you cause as a professional, within you specialty/ business. Eg: a carconstructor knows how to construct a car. If he makes a mistake and the brakes are wrongly installed and the car can’t stop in time becausse of it, and an accident is caused, he will be covered by a professional liability policy.
    An example of the difference between general liability and professional liability: a painter paints a door and spoils paint on the carpet. This damage will be covered by his general liability policy. A painter paints a door and uses the wrong kind of paint: this damage will be covered by his professional liability policy. If the painter does not have this policy, he will have to pay the damage himself.

    Do copywriters need these insurances (my personal opinion):
    General liability: I say yes, but only for the public liability part. Not for the product liability part. I have no example of accidental non-contractual damage after delivery of my text. I myself have a general liability insurance (only public liability). In general these policies are not so expensive (here in Belgium). The price you pay is based on the income of your business and the number of people your company has. (Pay attention to subcontractors, you might need to be insured for damage they do as well). The insurance limit for which you are covered also depends on your company. The minimum (if your company only counts yourself) I would say is $1000 000. SME’s usually get $2500 000 minimum.

    Professional liability:
    Difficult to say. The only reason I see to take it is if your client turns to you for damage made by the text you wrote. Eg. if you write medical articles for one of your clients, and because of a text you wrote wrong medication is used and people get ill … even if your client read your text several times before publication, he might turn to you and try to make you partially responsible for the damage made. These cases of course will come before a court, and the decision on who is responsible will depend on the jugde. But in case you are held responsible it is a professional liability policy who will cover the damage …
    I for the moment have no professional liability policy (although I have one multinational I work for), I included a sentence in my general conditions which states my client is juridically responsible for all my texts. Hope that is enough.

    My advice would be:
    – In general: take advice from an insurer you trust
    – General liability: yes, insure but only for public liability
    – Professional liability: take advice from an insurance company or an insurance broker (an honest one you can trust and doesn’t only want your money) and also ask your client why he wants you to take that insurance. Negotiate. A lot of people/ companies do not know which insurance covers what and why and just ask something without knowing why (especially smaller companies), so you probably both need advice. Multinationals have a risk manager which deals with the insurances, so he should know. But a marketing department of a multinational probably won’t know.It might also have become a general rule of the company that all suppliers they work with are insured that way, so it is included in all contracts without thinking.
    Also: I (and my ex-collegues) used to advice our clients to propose that their client should pay the premium (or part of the premium) if that insurance was really necessary for them. If their client finally was willing to pay, I never got to know ( it was business between my client and his client, we were in general not involved). I suppose if they really really want you, they do pay.

    Good to know: Professional liability and errors and ommissions was (if I recall well) becoming more and more an issue (especially in the US) at the time I was working at the broker. Where this will lead to: No idea, for a lot of professions, professional liability is usefull and necessary I think, so more and more companies will probably take this insurance. But I hope it stays reasonable and logic. Professional liability insurances are very expensive.
    On the other hand: it is logic that you are responsible for the professional advice you give … the discussion will be until where your liability goes.

    Hope this all explains a little and helps you further in your business.

  20. Kara Gray
    Kara Gray says:

    I had a gov. contracting client try to force the $1M policy issue about 4 years ago. Their contract was designed more for vendors who do prototyping work and the like. Because my services were nothing of the sort, and when I explained that I would have to pass the entire cost of the policy on to them, as they were the only client requiring it, they backed off. We actually came to a comfortable resolution for all parties: we removed the clause requiring the policy and added one stating that they were responsible for final review and approval of all materials submitted before publication, and as such bore full responsibility for any errors or omissions in the text. After all, how could I control what they did with my copy after I submitted it? I now make this policy part of all of my project agreements.

  21. peter
    peter says:

    Thanks Starr (the new one!) for a great story about the real estate closing. Love it. And absolutely preposterous. Had I been there (course, it’s been said that writers are those who think of the wonderful comeback way after plenty of time to ponder…), I would have asked each of those professionals how much they were making off this transaction, and yet, despite that tidy sum, they didn’t know their business well enough to ensure that what I was signing was correct, so they couldn’t be responsible?? Where INDEED does one get a job like that? Amazing. Kind of like one of us going to our clients and saying, “Um, now I need you to sign this form saying I can’t be responsible if the words I chose in writing your piece were really the best ones or not.” See how many times we’d get hired again…

    Of course, this whole insurance thing smacks of the same thing – an arbitrary, not-well-thought-out, cover-our-butts move that makes people feel more secure when in fact, it does little except add a financial hardship to the writer. Welcome to the world run by lawyers.

    Thanks An, for the primer on different types of insurance. I think I’m going to have to read it over a few more times before it truly sinks in… 😉 Though I strongly suspect that very few of folks people who’ve weighed in on this post are going to be running out any time soon to bulk up on coverage. For most of us, I imagine, it’s going to be a I’ll-cross-that-bridge-when-I-get-to-it proposition.

    For me personally, let’s just say it’ll be tough to convince me that I should suddenly be concerned about something that hasn’t remotely touched me or anyone I know in 15 years. That’s not saying that I’m asserting there’s zero validity to any of these arguments, just that until I’m forced to, it’s not likely to happen. I know: by then, it might be too late. Yeah. OK.

    And thanks Kara for a good story of a SANE resolution to a similar issue. I’m surprised you were able to talk some sense into them, but that bodes well for the rest of us to have meaningful conversations with clients about what they’re asking us to do.


  22. Kathy Stokes Murray
    Kathy Stokes Murray says:

    I’ve had two clients request $1 million policies as part of their ordinary contract. I went back to them and got a waiver from both clients’ legal departments, as they agreed it didn’t and shouldn’t apply to writers. These were two huge organizations, if that matters.


  23. Jenn Mattern
    Jenn Mattern says:

    I’m with Devon and Kara on this one.

    1. It crosses a line when clients try to control the finer aspects of your business. Controlling how you actually work and operate is a right reserved for employers (for instance, they have absolutely no grounds to tell you to register as a certain type of business as one poster noted).

    2. If they want to make demands regarding insurance non-standard to the industry and type of contractor they’re working with, they’d better be willing to cough up the dough to pay for it – in full.

  24. Mele Williams
    Mele Williams says:

    I am getting in on this late, and forgive me if someone else has touched on this and I missed it.

    If you have a consistent, longterm contract with a large company, some of this may be about the IRS.

    A number of companies disguise employees as independent contractors. Independent contractors cost less than employees (money owed to IRS). The IRS is tracking this type of activity and investigating those companies they believe are trying to get away with not paying employment taxes.

    How do you prove that an IC is NOT an employee? You get them to look like a “real business”. Real businesses have business insurance and in some cases, business entities like the LLC.

    When I was practicing law, my client, a small dialysis center ran into this problem. Retaining independent healthcare professionals is a standard industry practice. One of their ICs had the nerve to list them as an “employer” on their unemployment claim. Big read flag to the state treasury (thank God the IRS didn’t get involved).

    With the help of a tax professional, I was able to get them out of paying back taxes. But…I recommended some changes for the future. You guessed it. That they only retain freelance healthcare professionals who have general liability and workers compensation insurance. From what I recall, their ICs didn’t balk, because they had a somewhat steady gig working with my client.

    So you see, this may have nothing to do with errors or ommissions.

  25. peter
    peter says:

    Thanks Mele,

    MOST interesting. That could just explain what seems like an inexplicable situation. It seemed unlikely that the demand on the part of certain companies to freelancers to get insurance had no merit. I mean, if what you say is true, it STILL has no merit from the standpoint of its real and true necessity, but rather as part of crafting the right image. I do hope this trend doesn’t take off in a big way. Thanks for the insight…


  26. Christie
    Christie says:

    Very nice post. I was doing a search for specific niche content and was referred to your site and post. Have you posted any other relevant content in this niche on other sites?

  27. Peter Bowerman
    Peter Bowerman says:

    Thanks Christie, Glad you like, and no, this is the only place. I’d just Google something like “Do Writers Need Insurance Policies?” or similar and see what comes up. Hope you come back and weigh in again!


  28. Kristen
    Kristen says:

    Very late to this post, but I came to it because of a contract that demands I “maintain insurance coverage which is customary, appropriate and commercially reasonable in the insurance industry for the Consultant’s type of business.”

    I tried to remove the section, but they put it back in. Then I asked them to clarify what type of insurance that would mean I need to have, if any, they said they couldn’t say. So…I might need some type of insurance, but nobody (myself included) actually knows what type or if it’s necessary at all. And it’s important the section stay in the contract because “it’s standard.”

    It sounds like at least some of the others that have faced this were given specifics.

  29. Peter Bowerman
    Peter Bowerman says:

    Hey Kristen,

    Yeah, your situation sounds like a classic case of the BS surrounding this issue. It’s PURELY to cover their butts, and they’ve done no research into it, but it just sounds good (to their lawyers) that their writers should have it. Which, in a perverse sort of way, might work to your advantage…

    Look into whether there’s a personal liability component to your homeowners insurance (sometimes there is). If there is, maybe given that they’ve clearly given zero thought to the specifics of what kind of insurance you need, perhaps they’ll be easily convinced that you’ve “covered the base” and you can move forward. If not, not sure what your other options are.

    If that doesn’t work, I’d get pointed with them (diplomatically) about what kind of insurance they want you to get, while letting them know that insurance for writers in our field is absolutely NOT a standard operating procedure. Past that, you can either suck it up and get what they need or walk away. Good luck!

  30. Lisa Stockwell
    Lisa Stockwell says:

    I also just found this post while searching for whether any professional freelance copywriter has been sued for E&O. I have a large client insisting that I have both business and professional liability and include them as an insured on my $2 million policy. I’m not worth a fraction of that, so it’s ridiculous that I’d be insured for it. The first project is worth $10K, so it’s definitely something I don’t want to say no to. But the policies will cost $1500, which is a big cut of the earnings. The only ones who come out ahead are the insurers and lawyers. And it really makes me mad after 30 years of freelance writing without the slightest question of the originality or veracity of my work!

  31. Peter Bowerman
    Peter Bowerman says:

    That’s crazy, Lisa! And I’m sorry you’re dealing with that. I really haven’t seen the expectation growing among my clients, but I have no doubt that we’ll be seeing more of this. And it IS ridiculous, given that (in my understanding), it’s supposed to cover US if WE make mistakes.

    Yet, given the nature of our business—i.e., clients give US the source materials, interviews, etc., in order for us to do our jobs, AND approve the copy before it goes to print—it’s not based one iota on actual reality, or how the world works. It’s attorneys justifying their existence. Moreover, with the bulk of what we write these days going online, corrections take mere seconds. With any luck, you can get more work out of them, so the cost of the policies are defrayed over a larger base of work!

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