Errors & Omissions Insurance – Freelancing in the Language Industry

Any business that provides a good or service is responsible for the quality of said good or service in accordance with the terms of the contract, quote, and/or scope of work.

DISCLOSURE: This blog is written by a freelance interpreter based on personal research and experience. It is written for informational purposes only and does not constitute legal advice. For questions related to legal liability it is advised that you consult with legal counsel.

As freelance language professionals, whether we have our business registered as a legal entity or not, we are operating as a business. As such, some of our clients, agencies or other, may have certain expectations and may hold us liable when those expectations are not met. In fact, if you carefully review your contracts with said clients, you may find that some will explicitly require that you have insurance that provides liability coverage. Many of our colleagues who freelance in the language industry, however, choose not to purchase an Errors and Omissions Insurance Policy, leading us to question if we really need coverage.

Errors-&-Omissions-Insurance-2

What is Errors
and Omissions Insurance?

It is professional liability insurance that protects businesses from claims related to negligence or inadequate work.[i] In the Language Industry, this type of insurance protects business owners (for registered businesses or sole proprietorships) from claims related to adverse outcomes that could result from errors in the delivery of service (i.e. errors in the translation or interpretation).

What is the cost of Errors and Omissions Insurance?

Like most insurance policies, Errors and Omissions Insurance usually provides coverage up to a specified amount. Usually there is a set amount of liability coverage per occurrence and an annual aggregate limit, plus a deductible. The annual or monthly premium will usually change depending on the amount of coverage (including the annual aggregate) and the deductible. For example:

Professional Liability(Errors and Omissions)

$ 270

AnnualQuote #11746388

Liability Coverage

  • $250,000 – Per Occurrence
  • $250,000 – Annual
    Aggregate
  • $1,000 – Deductible

Professional Liability(Errors and Omissions)

$ 416

AnnualQuote #11746391

Liability Coverage

  • $500,000 – Per Occurrence
  • $500,000 – Annual
    Aggregate
  • $500 – Deductible

Professional Liability(Errors and Omissions)

$ 516

AnnualQuote #12013086

Liability Coverage

  • $1,000,000 – Per Occurrence
  • $1,000,000 – Annual Aggregate
  • $0 – Deductible

Quotes obtained October 2018 at www.insureon.com

Some contracts will indicate the amount of coverage required. For example:

Obtain a Professional Business Liability insurance policy, including coverage, with limits in an amount not less than $2,000,000.00 per occurrence for each such policy.

However, some clients may simply indicate in a contract, purchase order, or scope of work that the contractor shall comply with their standard posted requirements. For example:

Professional Liability
$1,000,000 – Per Occurrence /Incident/Claim
$500,000 – Annual Aggregate
$500 – Deductible

Is Errors & Omissions Insurance required for freelance interpreters or translators?

As previously stated, some clients may explicitly require errors and omissions insurance in their contract or policies. For example:

Professional liability insurance policy required whenever service provider is required to be certified, licensed or registered by a regulatory entity and/or where the provider’s error in judgment, in planning, design, etc. could result in economic loss to XXXXXXXX. XXXXXXXXX may require provider or consultant to provide proof of coverage for up to three (3) years after the completion of a project.

However, some clients may not explicitly require such insurance or may waive this requirement or free language professionals of such liability.

It is important to review all contracts, purchase orders, and/or statements of work carefully, as well as all related and applicable policies and standards when working with any organization to fully understand their insurance and coverage requirements. However, even when our clients do not explicitly require Errors and Omissions Insurance, as business owners, we may choose to secure a policy that provides some coverage, even if minimal, to protect us against claims. As a business owner, you should carefully consider the likelihood of a claim being made against you and the risk of the same. To do so, consider the legal implications a mistranslation or misinterpretation could have, which will depend on the type of content you are interpreting/translating, who your clients are, and what their own expectations and safeguards may be. Hiring a legal advisor to review your contracts/orders and help you weigh your risk is also a good idea.

[i] https://www.investopedia.com/terms/e/errors-omissions-insurance.asp

Please share your experiences related Errors and Omissions Insurance in the comments below.

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