Liability Insurance & Accountability in Freelancing

You know something that really irritates me about freelancers/independent contractors/whatever you call yourselves? The lack of accountability in your work...

Allow me to explain - when you are working on a specific project for a client, you should be responsible for the work you do (and don't do). That means - if you make a mistake that costs your client anything (their own clients or money), you should be willing to take responsibility for your actions. Normally that is in the form of financial reimbursement. However, there are other ways that you can "repay" your client.

Either way, if it was your mistake that caused the issue, you should be willing to take fault for it. Taking fault doesn't mean merely apologizing. No, there's much more to it than that. There should be some sort of consequence. Leaders step up to the plate without being asked. Followers wait to be confronted about the issue. Are you a leader or a follower?

That brings me to my next issue - the importance of liability insurance when you are working as a freelancer. In case you "mess something up" while working on a client's project, you need to have the peace of mind to repair what you did. Sometimes you can't afford to make things right with your client using your own money. Say for instance you build a shopping cart for a client and you don't configure it correctly. You set all of the products to sell at 50% of their true retail cost. This causes the client a loss of $50,000 over a 7-day period. What do you do when the client sues you for your gross negligence (you may have caught the error if you had some quality assurance mechanisms in place)? If you have no insurance, you may be forced to pay that cost out of your own money.

What type of insurance do you need? For that, it may be best to talk with an insurance agent. Overall, though, you should have some sort of umbrella coverage that protects you from a certain amount of damage. Many finance and insurance professionals carry at least $1 million worth of coverage. Again, talking to an insurance agent will let you know what will best suit your business.

How do you deal with accountability issues when working with clients?

Posted in: accountability,freelancing