If you run your own graphic design company, you should give some serious thought to how you can protect your financial assets. Every client you work with will carry some level of risk — for instance, having equipment stolen or damaged could lead to missed deadlines, resulting in a financial setback. Similarly, you could face hefty legal costs if you’re accused of copyright infringement or plagiarism.
That’s why it’s important to carry the right insurance, as it can protect your business from such accidents or unexpected mishaps. In this guide, I’ll dive into how insurance can protect you, the different types of insurance coverage available, and where you can get top-rated coverage.
Key takeaways:
- Due to the creative nature of the work, graphic designers can be at an increased risk of legal costs rising from accusations of copyright infringement or plagiarism. These issues are rarely black and white, increasing the likelihood of litigation.
- Other risks exist from running a graphic design company, such as bodily injury to on-site clients, property damage, and vehicular damage.
- Top-rated companies like Simply Business, ERGO – Next Insurance, and Thimble have the ability to offer quality coverage at affordable prices.
Graphic designer insurance costs & coverage types
You’ll run into risks in many different areas of your graphic design business. From operating a vehicle, protecting your property, to covering liability from potential lawsuits, the following are common types of business insurance that you should consider:
Policy type | Typical annual premium cost | Purpose |
|---|---|---|
General liability | $700-$3,000 | Covers accidents that cause injury to clients or their property |
Professional liability (errors & omissions) | $300-$900 | Pays for your legal defense for copyright infringement, plagiarism, or other related work mistakes |
Commercial property | $500-$2,000 | Pays for certain damages to business property |
Workers’ compensation | $500-$1,500+ | Required by most states and covers work-related injuries and illnesses |
Cyber insurance | $1,000-$2,000 | Covers financial losses that are a result of data breaches |
Commercial auto | $2,000-$4,000 | Provides coverage to individuals and property for business-owned vehicles |
General liability is best for providing coverage against accidental damage to third-party persons or their property. It may even be a requirement for certain commercial leases if you have an office location you rent. Examples of how it can protect you include when a client injures themselves while in your business premises or if you accidentally damage their property and they end up suing you for repairs or replacement.
This policy can even provide protection against personal and advertising injuries, such as being accused or sued for libel and copyright infringement. At the end of the day, it’s critical to have coverage if you have any business location open to clients, do any work where you handle client property, or run any form of advertising.
Professional liability coverage protects you when you make a mistake in your work that ends up causing financial damages to your client. For example, you submit a deliverable and accidentally omit certain verbiage or overlook particular design requirements that your client was contractually obligated to adhere to. You could then potentially be found liable and forced to pay a large sum of money from a court-ordered judgement. Similarly, if you miss a deadline that subsequently results in reputational or financial damage to your client, you could also be found liable for some amount of damages.
Professional liability insurance may also sometimes be referred to as communications liability, media liability, or errors & omissions (E&O) insurance. Depending on the specifics, this coverage may also cover you for legal defense costs related to libel and slander.
Commercial property insurance is something you should absolutely consider getting if you own business property. This coverage can cover costs associated with damage to not only the building, but also things like inventory, furniture, fixtures, and other business property. Commonly covered incidents include fire, vandalism, theft, and certain weather-related damage, such as from hail, tornadoes, and hurricanes.
As a special tip, if you’re looking to get both commercial property and general liability coverage, you can look into a business owner’s policy (BOP). A BOP bundles both types of coverages and does so with a bundled discount, allowing you to save money while also simplifying policy management.
If you have employees, most states will require you to get workers’ compensation coverage. This is designed to cover your employees’ costs in the event they have a work-related illness or injury. Costs typically covered can include things like lost wages, rehabilitation fees, and other medical expenses. Less common scenarios also include the coverage of things like job training in a new line of work (if the employee is no longer able to return to work in the same capacity), as well as survivor benefits to the employee’s family for income replacement.
If you handle any type of sensitive data, I recommend getting cyber insurance. It offers financial protection in the event of sensitive data being stolen as a result of a hack, and can cover things like data breach recovery, client notification expenses, fines, and fees for fraud monitoring.
This might apply to you even if you don’t think you handle sensitive data. If you keep a database of client information, it could contain personally identifiable information like email addresses, residence addresses, and phone numbers. If you process credit card transactions, that data could also be stolen.
If you own and drive a vehicle for business purposes, a commercial auto policy will offer financial protection in the event that you accidentally damage other persons or property. It will also help pay for repairs to your own vehicle if you’re involved in an accident. Depending on how you customize the policy, you can also get medical expense coverage, towing costs, and rental reimbursement, among other things.
Cost factors & how to save money
What you pay for graphic design business insurance depends on a lot of different factors. In short, it’s how big a risk you pose to the insurance company, the likelihood of the insurance carrier having to pay out a claim, and the expected payout.
What impacts graphic designer insurance costs
Take note that insurance carriers consider different factors to assess your risk. This also means variable weights on each factor, which translates to differences in the price to charge for each policy. With that said, here are some of the most commonly considered factors:
- Business location: Where you run your business matters to insurance companies. Crime rates, weather hazards, and other statistics can impact your likelihood of having to file a claim.
- Value of business property: The more valuable business property you have, the riskier it could be for an insurance company to provide coverage. Business property can include things like a commercially owned building, business-owned vehicles, business equipment, and inventory.
- Revenue and size of your company: The larger your company and the more clients you deal with, the greater your risk exposure will become. Think of it like car insurance, where the more miles you drive per year typically equates to a higher statistical likelihood that you’ll be involved in an accident at some point.
- Claims history: Businesses with a pattern of filing claims are likely to see higher annual premiums.
- Coverage limits and deductibles: The limits and deductibles you choose will impact the amount your insurance company could potentially have to pay out. Smaller coverages and higher deductibles tend to result in lower premiums.
How to save money on graphic designer insurance coverage
It can be difficult to see the value of insurance until you actually need to use it (which is hopefully never). For this reason, it makes sense to try to save money on your policy without sacrificing the quality of your protection. Here are a few things you can do to achieve that goal:
- Shop around: Get quotes from multiple insurance companies. Risk appetites among companies vary, as do the criteria for determining how much you pay. Just make sure that when you are comparing quotes, you also consider the company’s reputation and financial strength.
- Play around with your quote: Make changes to your quote and play around with different scenarios. You could be surprised to find that certain options don’t cost as much, allowing you to get better coverage at an affordable price.
- Check for discounts: Ask for a rundown of an insurance company’s available discounts to ensure you get everything you’re entitled to. Common examples include discounts for bundling policies, anti-theft devices, security alarms, fire alarm systems, security cameras, and much more.
- Raise deductibles: By increasing your deductible, it means that you have to pay a larger amount in the event of a claim before the insurance company is required to issue a payout. The upside, however, is that it can lower your premium.
Why graphic designers need business insurance
As a graphic designer, you’re in the creative business where it’s common to get ideas and inspiration from existing art or other creative models. It’s also common for new designs to incorporate some elements, whether it’s a shape or color scheme, from an existing business elsewhere. For this reason, it’s not always crystal clear when it comes to potential copyright infringements or plagiarism. And it only takes one other business owner to claim that you stole some elements from their design to cause a huge headache and months (if not years) worth of litigation.
Even if you believe there’s no basis for a lawsuit, it could still cost you a significant amount of time and money defending yourself in court. Add to that the mental stress and potential payout if the court rules against you, and it becomes clear how valuable it can be to have the right insurance to cover the financial costs.
But that’s not all. If you ever visit clients or allow them to visit your office, accidents could result in someone getting injured or property being damaged. Or imagine you get into a car accident on your way from the office to a client’s location. The liability and financial costs could potentially be large enough to force you into bankruptcy, if not seriously strain your company’s finances.
As you can see, risk is present everywhere, and because it’s not likely that personal insurance will cover these business-related incidents, it really highlights the importance of protecting yourself, your business, and your financial wellbeing.
Best graphic designer insurance companies
You’ll have plenty of options when it comes to graphic designer insurance companies. To save you time, I’ve researched some of the best companies and selected the following as my recommendations:
- Simply Business: Best for comparing multiple policies
- ERGO – Next Insurance: Best for ease of customization
- Thimble: Best for seasonal coverage
Simply Business: Best for comparing multiple policies
Pros
- Quickly compare quotes
- Purchase same-day coverage
- Fast online application process
Cons
- Not a direct insurer
- Limited online customization
- Coverage options vary by provider
Standout features |
|
|---|---|
Financial rating | AM Best rated Travelers, which owns Simply Business, an A++ (Superior) |
Why I like it | Simply Business’s homepage advertises nearly two dozen highly rated insurance carriers it partners with in order to deliver its online quotes. With just a single application, you’ll be able to view options, customize policies, and easily compare coverages and pricing. |
ERGO – Next Insurance: Best for ease of customization
Pros
- Purchase insurance online in less than 10 minutes
- Discounts when you bundle policies
- Licensed agents to advise you
Cons
- No 24/7 claims call center
- Coverage options are not as extensive as a larger carrier
- Not ideal for high-risk industries
Standout features |
|
|---|---|
Financial rating | ERGO - Next Insurance's AM Best rating is A- (Excellent) |
Why I like it | ERGO - Next Insurance offers most of its policies in three tiers: basic, premier, and deluxe. For this reason, it makes it incredibly simple to choose the right coverages without having to go through a complex policy line-by-line, something that could be quite time-consuming and frustrating. |
Thimble: Best for seasonal coverage
Pros
- Short-term coverage available
- Customizable liability limits
- Quickly adjust limits for venue requirements
Cons
- Not ideal for full-time businesses
- No 24/7 call center for claims
- Can be difficult to reach a person during regular business hours
Standout features |
|
|---|---|
Financial rating | Most policies are written through Markel or National Specialty Insurance Company (NSIC); Markel's AM Best rating and NSIC's AM Best rating are both A (Excellent) |
Why I like it | Thimble is one of the few insurance companies that allows you to get coverage for specific time-based needs. For instance, you can get coverage by the hour, day, month, or year. This makes it perfect for businesses that only operate seasonally, and can help you avoid having to pay for insurance during periods of the year when you’re not even in business. |
Frequently asked questions (FAQs)
It typically runs between $500 and $1,500 per year. However, your final out-of-pocket cost will be highly dependent on your own unique circumstances. Your business location, revenue, employee count, and claims history are just a handful of factors that could impact your annual premium cost.
It’s possible to get graphic design insurance as quickly as the same day. Many insurance companies provide you with the ability to get quotes and purchase policies online in just a matter of minutes.
Bottom line
It may not seem like it, but running a business as a graphic designer carries a lot of risk. Copyright infringement and plagiarism are common sources of litigation due to the creative (and sometimes gray) nature of the work. But risk can also be present when you have clients visit your office, when you’re driving to a client’s location, or when you are given sensitive data from a client. Having the right insurance protection can help you avoid becoming financially strained in the event of a work mishap that causes harm to you, your employees, or your clients.
