insurance fun

Hi All,

this might come under the category of rant, but if anyone has experience and can advise it would be much appreciated :

I’m doing some freelance packaging/product design work (evenings and w/e’s) for a big(ish) corporation…

they’ve given me a contract to sign that stipulates that I must have public liability and professional indemnity insurance which is fine, however the wording seems to make me effectively liable for anything they should choose to pin on me if they want to :
“Except to the extent such costs, claims, damages, losses,
liabilities and expenses relate to death or personal injury caused by the
negligence of the Company, the Supplier shall indemnify the Company from
and against all costs, claims, damages, losses, liabilities and expenses
(including legal expenses) of any nature incurred or suffered by the
Company or a third party howsoever arising out of or in relation to the

Meanwhile the small print on typical insurance policies seems to allow them freedom to not pay up if they so choose. Wording like : " won’t pay up if the liability that you’ve signed up to in the contract is too large". As a design supplier it looks like I am able to be a whipping boy for all concerned.

Is this all pretty standard and something that all designers have to live with or is it out of the ordinary and needing negotiation with the company?
Problem is that as a freelancer, I’m not in a great position to start requesting expensive legal documents to be changed. I can try, but their response may be to choose someone who will.


it does sound like they are setting you up, the IDSA has some legal advice for freelancers (members).

In my experience lawyers won’t bother with small fish…

I’ve had a somewhat similar experience in a client asking me to assume all liability. They weren’t a large corporate company, os perhaps in some ways easier to deal with, but anyhow, this is what I countered back with-

  1. As a small company/freelancer, it is difficult if not prohibitive to have the requested insurance and liability coverage. It’s one of the reasons that a freelancer’s rate is much less than a larger consultancy that is fully insured/covered.

  2. There needs to be an understanding of cost vs. benefit for both sides when it comes to liability. Why, for a relatively small project (say $5-10K in billing), would anyone assume a liability for a product that could potentially cost you $100K+ if something goes wrong and you get sued? It’s just not worth it.

If you can explain something similar to the above, esp. given they are a large company and for sure have the lawyers + insurance to cover their own ass, I think it would make a compelling argument and point of explanation.

Not mention, you are doing packaging design, not building a bridge or a pacemaker, so liability is more of a CYA (cover your a$$) issue than an actual likely issue.

However, reading the paragraph from the company again, i’m not so sure that your taking on liability is what they are asking for. It seems moreso that they are asking that you release them from liability, which is different… i could be mistaken… I don’t believe any contract your sign can release the company from being sued by a third party if that is the issue…

but ya, ask a lawyer if you can. (**i’m not a lawyer, so obviously my comments have no legal value -take them as you will.)

In the end, just remember from both sides that you get what you pay for and things like this are always open to some form of negotiation. If they want you to have a lawyer, go back and forth, it’ll cost them and gets rolled into your supplier costs. They likely already know this. As a small consultancy/freelancer myself I always approach these things with caution but also honesty and openness and believe a contract founded on understanding and agreement is better than one that is contentious and all lawyered up with everyone on the defensive.

Bottom line (esp. in the US), anyone can sue anyone and your best bet to avoid this is to have a good working relationship (and keep the lawyers out of the picture).


I’ve walked away from any freelance gigs that hit you with something like that. They want to dump all responsibility on the design guy instead of using a checks-and-balance process to make sure the design works.

Lawyers suck.

thanks guys.

will let you know how this goes since others may be in the same situation…