Insurance for Website Designers: What You Need to Know
It’s pretty self-explanatory who insurance for website designers is for, but what policies do experts recommend for these professionals? What falls into their job description, and what are their specific exposures?
When we need information about pretty much anything we can think of, our first instinct is to look for it online. If we want to know more about a company or a product, we also look them up on the Internet.
Statistics say that at the beginning of 2021, around 71% of small businesses had a website. The fact is that every organization, individual, or company that takes its business seriously needs to have an online presence in the form of a website.
That’s where you, as a website designer, come in. Your job is to design and maybe later maintain functional, user-friendly, visually appealing websites.
Since that is a lot of responsibility you need to take on, it might be a good idea to purchase insurance for website designers and protect your company from potential claims from unsatisfied clients.
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Why Do You Need Insurance for Website Designers?
Suppose you want to start working with a new client. If this is not your first client, you should do the same thing you did with all your previous clients —sign a contract.
Of course, do the same if this is your first client, as you need to protect your interests in the deal and define the terms of your collaboration.
Given that a contract usually defines deadlines and lists the services you should provide as a web designer, it should name the terms both sides are comfortable with and can fulfill.
Failure to meet your deadlines can lead to a breach of contract lawsuit from your client. If you deliver your services on time, but your client is not satisfied with your work, they can decide to sue you.
Even if your services were top-notch and you did nothing wrong, your client could still feel that you didn’t live up to their expectations and file a claim against you.
That claim would probably get dismissed, but you would still have to defend it and cover all the legal costs.
Of course, there is also the possibility of you making an unintentional mistake and not delivering what you promised to your client.
They would then have every right to sue you for professional negligence, and you’d probably have to pay the damages.
Imagine this situation: a retail store hires you to design its website. Approaching the deadline, you realize that you still have a lot to do and very little time.
So you try to speed things up to deliver what you promised in time, and you mess up the website navigation. That could trigger your client to file a liability lawsuit against your business.
Another threat that could endanger your business is the threat of suffering a data breach or any other kind of cyberattack that could threaten or crush your systems. If any of your clients’ information got compromised, you would be responsible for recovering it and paying all the related costs.
Insurance for Website Designers: What Policies Do You Need?
Apart from the basic policies that every business should purchase, some policies are specific to you as a professional service provider.
A good insurance broker will help you tailor every coverage to your needs to ensure you get the best option for your risk exposure.
Let’s look into the policies you should consider buying for your business.
Professional liability insurance or errors and omissions (E&O) insurance
Professional liability insurance is probably the most important policy for website designers.
Since website designing companies are technology companies, the policy that would best suit their needs is the tech E&O insurance policy. In short, this policy will cover legal costs arising from a client’s discontent with your work. It will cover the claims of:
Professional errors resulting from your work
Contractual liability (failure to deliver what you promised)
Professional negligence
Breach of warranty
Copyright infringement
Cybercrimes and data breaches that endanger third parties
Professional errors happen, especially if you are swamped with work and don’t have sufficient time to devote to each project.
If the website you deliver to your client doesn’t meet their expectations, or you don’t deliver it on time, they can hold you legally liable.
Also, if parts of the website are broken and simply not working, they will most likely regard it as your professional negligence.
E&O insurance policy would help you defend these claims, given that the mistakes you made were unintentional and that you didn’t do anything illegal.
Depending on your particular exposures, you can add medial liability and intellectual property liability coverage to your professional liability policy.
Cyber liability insurance
Cyber liability insurance would cover your financial losses in case of a data breach or other type of cyberattack.
A first-party insurance policy covers your losses, and a third-party policy covers the losses that other affected parties might suffer.
One significant aspect of cyber liability coverage is the network security coverage that responds if a company suffers a malware or ransomware attack, email compromise, or a data breach, among other incidents.
Cyber insurance pays for data loss and recovery, lost revenue due to a successful data breach, computer fraud, and cyber extortion.
If your company suffers a data breach that exposes confidential information, your policy will cover all related costs, including legal expenses, if you face liability lawsuits from the victims.
Most policies also help policyholders design solid and cost-effective security and data encryption protocols.
Commercial general liability
Commercial general liability insurance covers the primary risks every business owner faces.
This coverage is perfect for everyone who meets their clients in an office because it responds to claims of third-party bodily injury or property damage that happened on your premises or are somehow related to your product.
General liability insurance would also respond if your client claimed libel or slander from your side.
The policy would pay for the legal costs of defending the claim, settlements resulting from the suit, should you decide to resolve the case outside of the courtroom, or court costs and fees if the case goes to trial.
The policy would also cover your loss of income in case it occurred.
Commercial property insurance
It’s true that many people work remotely now and have home offices, but that doesn’t mean that they don’t need property insurance.
Your home office functions as any other office, and the equipment you use for your work is the same at the home office and in the regular office.
You should then consider obtaining a home-based business insurance policy.
Commercial property insurance covers the building or office space where you conduct your business and your work equipment.
Your computers, monitors, and any other devices you use can break in case of a major power surge in your area.
Property coverage can also extend to cover your equipment if you take it off-premises. Depending on the extent of coverage, you can file a claim for a replacement computer if yours gets stolen.
A robust policy could also cover your office furniture or even the assets outside of your building. Those include a company sign, any landscaping, or fences that your business owns.
If your small business needs commercial general liability and property insurance, a good solution could be to bundle them into one policy called the business owners policy (BOP).
A BOP usually includes business interruption insurance that covers your business income if you are forced to suspend your operations for a certain period of time.
Workers compensation
Workers compensation insurance is mandatory for all businesses with employees in all states except Texas.
Every state has its own regulations, so it’s probably best to check with your state to ensure you are compliant with corresponding laws.
Workers compensation insurance will cover an employee’s medical bills and a percentage of their wages in case of a workplace injury or illness.
It would also pay for physical therapy or any necessary medication.
Employment practices liability insurance (EPLI)
Employment practices liability insurance (EPLI) is another coverage that you only need if you have employees.
It provides coverage if one of your employees sues you for harassment, discrimination, wrongful termination, or other employment-related matter.
EPL insurance would pay for the legal costs of defending the lawsuit as long as you didn’t do anything illegal.
It would also cover any settlements or awarded judgments if you decide to settle or if the case is resolved in court.
How Much Does Insurance for Website Designers Cost?
A few factors influence the amount you will need to pay to get insurance for website designers.
Some general rules say that smaller businesses with fewer employees and smaller business income will pay less to get their coverage. Here are the main factors that influence your insurance premium:
Business revenue: Simply put: the more money your company makes, the higher your insurance premium. Companies with higher income stand to lose more in lawsuits than less profitable companies.
Location: Businesses located in huge cities, like San Francisco, Los Angeles, or the New York Metropolitan area can expect to pay more for insurance than businesses in smaller and less populated cities.
Company size: As your business grows, you hire more people to handle the workload. The price of some insurance policies will also rise as your exposure increases with more employees you hire.
Policy limits: Another simple analogy says that the higher the policy limits, the higher the premium will be. If you are unsure about what policy limits to get, you should consult with your broker to ensure you don’t end up with too little or too much coverage in your hands.
Type of services offered: services you provide and the risk they bring to your business will also affect the premium amount.
If you are ready to purchase your insurance for website designers, you can start by signing up to Embroker’s digital platform and getting your online quote.
If you need more information about what policies and the amount of coverage you need, you can always reach out to our experienced brokers in the chat below.
