Professional Indemnity insurance

Drawcard

Hi,

I am getting ready to release a font (selling in USA, foundry based in Australia) and am at the contract stage.
I was wondering if other foundries here have taken out professional indemnity insurance to sell fonts internationally?
To cover scenarios like the ones listed here: https://www.insurance.com.au/business-insurance/professional-indemnity-insurance
What advice can you offer? 

Thanks

JoyceKetterer

I looked into it ages ago, and also errors and omissions.  I talked to a few insurance companies and in all cases I didn't have confidence that they understood our business enough to intelligently write a policy.  That could have meant that they wouldn't honor it in the end because they could argue it hadn't actually covered the issue.  Also, I think it makes a lot more sense for foundries doing custom work than for lost of us selling retail licensing.  Darden Studio has been around almost 20 years and has a lot of popular fonts and we've never so much as had to settle an issue like this.

Thomas Phinney

I have such insurance for my work, covering both my consulting and font forensics.

BUT the primary reason for it was that one of my major clients required it. That alone made it worthwhile for me. So I would still have it, even if I knew or believed it would be completely ineffective in providing actual protection aside from that one client!

If it wasn’t for that client? I might well still get it, but it would be a close call.

If I were a typical foundry or solo type designer doing retail and commission work? I might be easily swayed to Joyce’s point of view on it. I would have to give it considerable thought.

TimAhrens

You may consider setting up some sort of limited liability company as an alternative to an insurance. If the goal is to be prepared for the case of getting (successfully) sued for a large amount of money, and avoid being financially ruined for the rest of your life, then limited liability can serve a similar purpose. The details vary from country to country, I suppose.

JoyceKetterer

@Thomas Phinney to be clear, if I believed the insurance company understood our business and it really was going to protect us I'd have got it.  As it stood I felt that I might be paying for a mirage.  

PS -   I think at least one of our large clients did try to require it, when we did a minor customisation for them of Omnes years ago.  We talked them out of it.  There may have been others I'm forgetting.  

John Hudson

I dimly recall a draft contract from a client requiring us to obtain such insurance, and I struck out the clause. After a bit of back and forth with their lawyers, they agreed that fonts were low risk and accepted the deletion.

Thomas Phinney

I should mention that I also have an LLC, through which all my business runs.

But to be sure, the combination of having a large corporate client for whom I do ongoing font work that could impact all their divisions, plus lots of lawyers as clients, clearly puts me at higher risk than the average type designer — or indeed almost anyone else on this forum.

Thierry Blancpain

We have it as it’s often required doing custom work for larger companies. I agree that’s it’s mostly useless. One company even tried to require us to get automobile insurance, despite the company not using any cars. I would not get it for retail work.

Drawcard

Thanks everyone for the fantastic insights. I think it pretty much lands with where I'm at too - while it's a good idea to have PI cover for domestic activities, and also incorporating a company for extra protection, it's likely not worth the exorbitant cost to get international cover when simply retailing in online stores.