My Business Is Better Because I Have E&O
I had heard many people say Errors and Omissions (E&O) policies were not necessary for translators. I went along with that… until a direct client required it. In the medical field, it is common for direct clients to require a one million dollar E and policy limit. When I signed the policy, my insurance agent walked me through the do’s and don’ts. Now I’ll walk you through my thoughts on what is and what is not covered.
What does it cover?
My damages and defense costs, up to a limit, incurred from claims as a result of a wrongful act in performing insured services (translation) for others.
What does it NOT cover?
Bodily injury or property damage. That’s fine. I’m a translator. This means that someone tripping in my office is not covered. There is a separate insurance policy for that. If I am driving to an appointment and I hurt someone while driving, that would be bodilyinjury. My E and O does not cover that. If my laptop falls on someone’s iPhone at a training session and damages it, that would be property damage covered by a separate insurance policy. It is called Business Liability Insurance, commonly known as Trip and Fall insurance. Most businesses have this.
Infringement of intellectual property. So… I don’t want to be a party to plagiarism. I pay for all my software. I do not post other people’s ideas as my own on my blog.
Unfair competition or any other violation of antitrust laws. I need to be aware of antitrust laws so I don’t violate them. The Federal Trade Commission and the Department of Justice have information on the subject. Some clear-cut examples are plain arrangements among competing individuals or businesses to fix prices, divide markets, or rig bids. These are carefully defined in documents in the links provided.
Discrimination prohibited by federal law. As a freelancer, I do not have employees. Therefore, this does not apply to me. If I ever have employees (not likely), I will have to abide by the same rules as any other employer.
Gain or profit I am not entitled to. In other words, I make what my invoice says and no more. I don’t upsell, take advantage of the knowledge to trade stock… etc.
Any liability I make myself responsible for in a contract. If I say I will be responsible for x, then the insurance company won’t keep me from being responsible for x.
Violations of securities and blue skies laws. In other words, I have to be above board in my financial dealings.
Bankruptcy. I had better keep paying my bills… That is good business.
Breach of contract.
- If I say the translation will be ready by May 1, and on May 15 I have not contacted my client about it… I am in breach of contract.
- If I promised a reviewed translation and I deliver a Google Translate version, I am in breach of contract. In one contract, I specified that any disputes regarding the quality of my work would have to be settled by an ATA grader in my language pair. This kept things nice and clean. I state that I am only responsible for the text I deliver, and if the client changes a single word, I am no longer responsible for the document.
- I could have said that I would keep the information confidential, but since I know people in the engineering field, I go and tell them about a new development. That would be violating an NDA – breach of contract.
Any act a jury or arbitrator finds dishonest, fraudulent, etc.Be honest. If I submit a machine translation instead of a quality translation to meet the deadline, that might be considered dishonest, since I tell clients that the translation will be done by a certified translator and reviewed by another certified translator.
In short, E&O covers me for errors and omissions that happen inadvertently, provided that I made a reasonable effort to prevent them. It does not cover me for lazy work, breach of contract or dishonesty. It does not give me cover to be lazy from that point on. Clients expect me to have it because they know that any human has a margin of error in any work we do. Perfection at all times is simply not possible. It gives my clients peace of mind.
One client who hired me for a medical website translation had this conversation withme:
- Do you have a one-million-dollar policy limit?
- You don’t really think that’s going to be necessary, right?
- If something goes wrong, the damage is going to be much greater than the price of your translation. We don’t expect you to be able to cover it. That is why we want you to have insurance.
I made sure I had coverage and increased my insurance coverage.
E and O insurance gives our clients peace of mind. Think of it this way. If someone was going to cut down a 130-foot tree in the front yard next to your home and told you “I am awesome, so I have no insurance,” what would you do? Well… this is a true story, and I got very nervous when that happened. I had two small children sleeping in the house. I got them out, and we watched the tree fall from a safe place. I wrote down the guy’s license plate number so I could call the police if anything went wrong. Is that how you want your clients to treat you? I don’t. This fellow did not have the money to replace my house or pay for the damage that tree could do to it. It missed the fence across the street by a few inches. All the neighbors were watching the proceedings very closely.
That is not the way to build trust. People work with people they know, like and trust. I build trust with my clients.
Image source: Pixabay