Professional indemnity insurance helps protect you and your business if you make a mistake, and your client sues you for their loss. But you already know that.
And contrary to popular belief, claims happen all the time. Some are justified, some aren’t; some go nowhere, some take years and cost £tens of thousands.
So we thought you might like to hear about one - in this case, a designer's professional indemnity claim. It's interesting because it makes you think and it gives you an idea of what you're paying for.
The names have been changed to protect the innocent but apart from that, everything’s just as it happened.
A tale of corruption
It's May 2011 and Andy's small design agency, Pont Studios, is running at full capacity.
Of particular concern is the annual report for The Green Group, their biggest and most prestigious client. It's the 17th year that Pont have done the design, copy and print for Green’s annual report and this year’s design is bigger and glossier than ever.
As all designers know, the devil’s in the detail. The two companies have worked closely through long days and late nights to make sure the report is top-drawer. It's been worth it though – the team is justifiably proud of the end result.
With the final version in the bag, and on the day the report is due to go to print, Andy takes a call from Green’s chief executive. He’s spotted a small error: the CFO’s name appears twice in the list of people to be thanked.
No big deal. Andy fixes it while they talk; along with a couple of other last-minute amendments to the index page. The final version is saved and sent for print.
It's not long before 5,000 shiny, new annual reports are rattling off the printing press. Job done, then.
Don’t count your chickens
Well, maybe not quite. Unfortunately, although the report was amended correctly and the file sent to the printers on time, it had somehow got corrupted along the way and the changes hadn’t saved properly. All 5,000 reports were wrong.
Although the printers had shown a sample copy to Green’s CEO early in the print run, his brief was to check the photos only – as per the procedure followed for the last 17 years. So the print errors slipped through.
It was only when Andy travelled to Green’s head office to personally deliver 100 copies that he spotted the errors (while idly thumbing through the pages, waiting for the CEO’s PA to return from lunch). Hardly the ideal way to find out …
So what to do? Not unreasonably, Green’s CEO wanted the annual report to be reprinted and the mistakes corrected – and quickly. Pont couldn’t risk upsetting (and possibly losing) their biggest client by refusing to bear the cost of the reprint themselves, and they could hardly ask Green to ‘go Dutch’.
Faced with the prospect of losing one important client and a good £few thousand , Andy got in touch with us. He was pretty sure that this was the sort of thing his professional indemnity insurance could help with.
He was right. One full and frank conversation later and we were up to speed with the gravity and urgency of the situation.
The first thing we did was explain where he stood (pending the insurer’s definitive view), lay out exactly what we needed and, more importantly, reassure him as much as possible. While he set about collating and sending through all the necessary information, we called one of the claims guys at Pont’s insurer and ran through the details with them.
All’s well that ends well
Whether the policy would respond or not was fairly easily determined. Pont’s liability was clear and there was certainly a case to answer. Having confirmed cover, the only sticking point was the cost of the reprints – even without Pont’s margin, the bill would be around £14,000. Ouch.
The insurer suggested that because the amendments were very minor and, arguably, Green shared some responsibility for the errors, there might be a deal to be done on the cost of the reprints. It was worth a try.
With support, advice and direction from his insurer, and from us, Andy started negotiations with Green. Thankfully, common sense prevailed and they reached an agreement – all within a week of his first phone call to us.
A cheque for just over £9,000 was soon winging its way to Andy along with instructions to the printers to fire up the presses again. The Green Group got their (correct this time) annual reports just in time for their AGM and Pont Studios got to keep both their reputation and the relationship with their most important client intact.
And the lessons learned?
Don’t trust technology, obviously. Check what’s been received is what you sent (that goes for paper files too).
Most importantly though get everything signed off, even last-minute amendments. Sign off protects you and puts the onus on your client to check everything’s OK. Once they’ve signed it off, it’s their responsibility, not yours.
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