The question below was posed to me as “The question no copywriter wants to answer…”
Now, as I write this, I’m hesitating as to whether it’s a good idea here, for a pile of reasons.
And yet, this is Mailbox Monday. And Mailbox Monday is where you get to ask your questions, and as long as I believe answering your question will be beneficial to a large enough contingent of my readers, it gets answered here.
So, if I’m asked to boldly go where no one has gone before…
I guess that’s where we’re going!
If you’d like YOUR question — about marketing, copywriting, selling, business, life, or whatever — answered in an upcoming Mailbox Monday issue, simply send it to Roy@RoyFurr.com.
Today’s question in a moment — first, FREE Story Selling training for you…
If you’re on the wait list for the Story Selling Master Class, you got this link a bit ago. But for those of you who aren’t, I wanted to share.
I’m doing a special encore presentation of the free training on Story Selling I released back in August.
Again, it’s no charge — and no extra opt-in. You’ll discover:
— Just how powerful and profitable Story Selling can be…
— The 3 Pillars for successful Story Selling…
— The secret reason top copywriters focus so heavily on this one skill…
Here’s the link to watch the video now: https://royfurr.clickfunnels.com/storymc-video1
Now on to “The question no copywriter wants to answer…”
I’m taking advantage of your recent email offer to ask questions of you. I’ve been asking this question of the good folks at AWAI, of the copywriting Facebook groups I’ve joined, and searching fruitlessly all over the internet.
Here’s the question:
Do most freelance copywriters carry Errors & Omissions insurance coverage?
What I’m getting from the limited amount of responses I’ve gotten so far is that most copywriters do not carry the coverage, and don’t see the need. As a matter of fact, many don’t even form a legal business entity for their copywriting business to protect them from personal liability.
I understand that AWAI wants to avoid giving any legal, financial or liability advice or recommendations. Boy, do I understand, having been in the insurance industry.
But I’m not asking for advice. Or a recommendation. I’m really just trying to get a sense for what most freelancers are doing about coverage. Personally, because of my insurance background, I tend to think it’s a good idea. Maybe this is a great example of Maslow’s law of instrument — when all you have is a hammer, every problem looks like a nail.
But all that aside, I want to get a sense of what working, successful copywriters are doing. My assumption is that if most copywriters don’t carry the coverage, and there aren’t a lot of horror stories of clients suing copywriters for damages, then there must not be much of a problem in the industry.
So, that’s my long-winded explanation of my basic question, once again:
What do most freelance copywriters do about carrying Errors & Omissions insurance coverage? Is this at all an issue of concern among the industry? What’s your take on this, Roy?
P.S. I’m just getting started in my freelance copywriting career. The coverage is not cost prohibitive, but I’d like to avoid as many unnecessary expenses at the start-up phase as possible. If there doesn’t seem to be a lot of risk in the industry, I’d feel better about putting coverage off. Plus, I’m the curious sort — I’d like to know what the overall sentiment of the industry is.
P.P.S. Thanks for all the great information you provide. Great stuff!
Insurance for copywriters and consultants… Do we get it? Do we need it?
I’ll start this with a whole string of standard disclaimers.
I’m NOT a lawyer. I don’t play one on TV. I don’t think I’ve even ever had a dream or nightmare about being a lawyer.
I’m also not an insurance salesperson, accountant, or government official.
I literally have no legal grounds for giving you any kind of advice that even borders on legal on these grounds.
There. Is that enough?
First: do copywriters and consultants get insurance?
I have heard of some copywriters getting insurance. I think it’s exceedingly rare. I know some who border on very aggressive with their marketing claims are more adamant about carrying a policy that protects them.
I don’t think most copywriters have any kind of insurance under the Errors and Omissions category. Heck, most — even the successful ones — are just trying to keep up with their health insurance premiums! (Joke! Kind of…)
For readers who don’t know, Errors and Omissions insurance is our version of professional liability insurance. If we include or leave out something in a piece of copy and it causes harm to the client or customer, it could protect us in whole or part from legal action.
Again, if the question is whether or not copywriters get this, I think in most cases the answer is no.
Regarding establishing a legal business entity…
I’ve done all copywriting work under a S-Corporation since 2007 (basically, when I started taking money for ANY freelance work).
I have an accountant who helped me figure out that was the right choice for me. It may not be the right choice for you — get an accountant.
I do strongly recommend establishing some kind of legal business entity. There are all kinds of reasons.
It can help you save on taxes. It can provide some legal protection. And, it looks much more professional for working with clients.
Tell me more about legal protection?
Regarding the legal protection you can get by setting up a business rather than freelancing under your own name, I can’t help you much. I know it provides layer of legal insulation. But beyond that — or even to fully understand that — I recommend speaking to a qualified accountant or lawyer who specializes in that area.
If you’re concerned about legal protection in general, you should work really hard to understand contracts.
Frankly, a contract is a much more powerful form of legal protection than insurance. Insurance helps you pay the bill once the crap has been piled on you. A good contract can help ensure the crap is not piled on you in the first place.
There are three really important ideas that I believe should be in represented in any copywriting agreement or contract.
THIS IS NOT CONTRACT LANGUAGE. Don’t use it like that. I’m just writing this to get these points across.
- Your expertise. You’re not a lawyer. You’re a copywriter. Your client is retaining you to write for them, to the best of your writing abilities. Because marketing can have legal limitations and consequences, they are responsible for also obtaining legal counsel to review all copy before it is used publicly. They are also responsible for any legal consequences arising from that use.
- Hold harmless. This is a legal term. Basically, the clients agrees to hold you harmless for any loss, damage, or legal liability that may arise from the use of the copy. Because you’re providing the copy to them with the understanding it will be reviewed for legal compliance, it’s up to them to complete that final step before using the copy.
- Indemnify. More legal language. This is very close to hold harmless — they’re often used together. Basically, they will protect you against any expenses, judgments, fines, settlements, and attorneys’ fees they accrue in protecting the legality of the copy.
These three concepts go much further than any insurance in protecting you against legal consequences of working with clients. I’ve asked clients to adjust their contracts if I didn’t feel they offered me these basic legal protection.
Finally: the best legal protection is…
There’s not much better legal protection than the clients you choose.
While nothing is a sure thing, there are some considerations…
— Big companies are usually better able to handle any legal issues that may arise.
— Companies that are used to working with copywriters and who value them will usually be aggressively protective of their copywriters in the event of any legal issues.
— Clients who have an active compliance department are usually very aware of any potential legal issues, and as much of a headache as working with compliance can be, it’s better than the alternative.
— If a client uses aggressive, bold copy, you want them to have an aggressive, bold legal team in place to back them up.
— If YOU act with integrity and question and document anything that seems off, it can provide some support if there are any legal questions around your writing.
If you’re working with A-list direct marketers, I think for the most part they have you so insulated that Errors and Omissions insurance will be something you pay for forever, but that never provides any real protection.
If you’re working for smaller, more entrepreneurial clients, I’d consider it much more seriously, as you’re much more likely to run into a situation where you’re on your own legally and may need that extra protection.
Ultimately, insurance companies are in business to make a profit, and they probably make a lot of profit on this form of insurance. But then again there’s no doubt thousands of stories of people who had the insurance and were thankful for it.
Hope this is helpful!
Yours for bigger breakthroughs,
PS — You should watch the Story Selling video right now. Click here.
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