A small fee and a large exposure

The asymmetry nobody prices

A freelancer is paid a few thousand for a project. The client prints fifty thousand catalogues. The phone number is wrong.

The fee was small. The loss is not, and it is not proportional to anything you earned. This asymmetry is the whole subject: your potential exposure on a job is unrelated to what you were paid for it, unless you do something about it.

Two instruments address it. A limitation clause in your contract, and insurance. They work differently and neither replaces the other.

The limitation of liability clause

A term that caps what you can be liable for. The common forms:

A cap at the fee. “The designer’s total liability under this agreement shall not exceed the fees paid for the work.” Simple and widely used.

A cap at a multiple of the fee, or at a fixed sum, which a larger client may insist on.

Exclusion of indirect and consequential loss. This is the one that matters most: excluding lost profits, lost business and reprint costs, as opposed to the direct cost of the work itself.

Three honest qualifications. Such clauses are subject to national rules on unfair terms and reasonableness, and a court may set aside a cap it considers unreasonable, particularly against a consumer. Most systems do not permit you to exclude liability for death or personal injury caused by negligence, or for fraud. And a large client will often have its own contract with a far higher cap, which is a negotiation rather than a formality.

Nonetheless: a stated cap is enormously better than silence, it is normal commercial practice, and most clients accept it without discussion.

Proofreading, and who signs it off

The specific, recurring disaster in visual work is a typographical error in something produced at volume. It is worth building a process around, because it happens to everyone.

Get written sign-off on the final proof. Not approval of the design: approval of the artwork exactly as it will be produced. Send the final PDF and ask for explicit confirmation: “please check every detail including the phone number, the address, the prices and the spelling, and reply confirming this is approved for print.”

Say plainly in the terms that the client is responsible for checking factual content: names, numbers, prices, addresses, legal wording. You are responsible for producing what was approved; they are responsible for the accuracy of their own information.

This is not passing the buck. The client is the only party who knows whether their new phone number is correct. Making the responsibility explicit means the check actually gets done.

Then check it anyway. Read the numbers aloud, backwards. It catches more than reading forwards, because it prevents your brain from processing the meaning and skipping the digits.

Professional indemnity insurance

Insurance covering claims arising from professional work: negligence, errors, and depending on the policy, infringement of intellectual property rights, breach of confidence and defamation.

Whether it is worth buying depends on what you do and for whom. It becomes clearly worth it when your work is produced at scale where an error is expensive; when you work with large organisations, many of which require it contractually; or when your work carries regulatory content such as medical, financial or safety information.

It matters less for small-scale, low-consequence work, though the premiums for a one-person creative practice are usually modest relative to a single project.

Two details worth understanding rather than skimming. Most professional indemnity policies are written on a claims-made basis, meaning they cover claims made during the policy period, not work done during it, so lapsing cover leaves past work unprotected, and “run-off” cover is what addresses that when you stop trading. And policies typically exclude deliberate acts and known circumstances, so a claim you could already see coming when you bought the policy is unlikely to be covered.

Read what the policy actually excludes. Intellectual property infringement is included in some creative policies and excluded in others, and it is one of the more likely claims in this trade.

Public liability, and the other kinds

Public liability covers injury or damage to third parties: relevant if you shoot on location or install work.

Equipment insurance covers your tools, which for a photographer may be the largest asset in the business.

Contents cover matters if you work from home; a domestic policy frequently excludes business equipment and business use, which people discover after a burglary.

The free protections that do most of the work

Before buying anything, four habits remove a large share of the realistic risk:

1. A written proof approval for everything produced at volume.
2. A liability cap and an exclusion of consequential loss in your terms.
3. A client indemnity for material they supply.
4. Archived evidence: the approved PDF, the approval email, the licences, the dated files.

None of these cost money. Together they cover the ordinary failures far more effectively than insurance does, because they prevent the claim rather than paying it.

What to do when something goes wrong

Tell the client immediately, before they find it. Establish what was approved and by whom, from the documents rather than from memory. If you are insured, notify the insurer early: most policies require prompt notification and late notice can prejudice cover.

Do not admit liability in writing before you understand the position, and do not offer to pay for a reprint in the first emotional hour. Many policies also restrict your ability to admit liability without their consent. Be responsive, be factual, and find out what actually happened first.

Where it was your error and the sum is small, fixing it at your own cost quickly is often the right commercial decision and buys a great deal of goodwill. Where the sum is large, this is exactly the situation the contract and the insurance exist for.

The limitation

Insurance and contract terms are national products. What a limitation clause may exclude, whether an indemnity is enforceable, what insurers offer and what is legally required all differ by country, and a policy bought in one country may not respond to a claim brought in another, which matters if you have foreign clients.

The general shape is stable: cap what you can, exclude consequential loss, get written approval for anything produced at volume, and insure when the consequences of an error exceed what you could absorb. The specifics need a local answer, and it is a cheap one to obtain relative to a single claim.