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Professional indemnity insurance

Postby TheColin » Mon Aug 12, 2019 2:52 pm

Hi all,

I am hoping to join an agency to do some sound design/mixing work, but they require that I possess professional indemnity insurance cover for £1 million. So far the cover I've been offered costs a small fortune! The only affordable professional indemnity insurance was Musicians Union but unfortunately it only covers music tuition situations, so it's no good.

Anyone got any suggestions for professional indemnity insurance providers for sound design and mixing work? - Or unions which provide good discounted PI insurance to members?

Cheers,
Colin
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Re: Professional indemnity insurance

Postby MOF » Mon Aug 12, 2019 3:07 pm

BECTU, it’s £40@ for members.
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Re: Professional indemnity insurance

Postby TheColin » Mon Aug 12, 2019 3:21 pm

MOF wrote:BECTU, it’s £40@ for members.

Are you sure that's not for the public liability insurance? I think for professional indemnity BECTU members can take out "media freelancer insurance" through Hencilla Canworth. I chatted with this insurer on the phone and their estimate wasn't looking good, but the guy is going to get back to me :(
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Re: Professional indemnity insurance

Postby Hugh Robjohns » Mon Aug 12, 2019 3:23 pm

I think the standard Bectu membership only provides free Public Liability insurance (PLI) as part of the fee as a 'group buy' deal.

However, Bectu also offer a 'Media Freelancer' insurance option which extends the insurance cover extras -- albeit on an individual basis -- for things like equipment cover, employers' liability (if you employ assistants), public and product liability, buildings insurance, professional indemnity insurance and so on...

But it's all done through Hencilla Canworth Ltd -- who are specialists in the music/tv/film industry -- so you might as well contact them directly. https://www.hencilla.co.uk/

Edit -- I see you've already been down that route... I doubt you'll find anyone better than HC. Most insurers don't understand the industry so won't quote anyway, or won't offer appropriate cover even if they do.

Professional Indemnity cover is always going to be expensive because the potential costs of litigation against you as the professional if you get something seriously wrong could be very high! Then again... it could be money well spent if you do and the brown stuff hits the impeller!

H
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Re: Professional indemnity insurance

Postby Forum Admin » Mon Aug 12, 2019 3:30 pm

Hugh Robjohns wrote: the brown stuff hits the impeller!

Brilliant turn of phrase there, Hugh. :thumbup:
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Re: Professional indemnity insurance

Postby TheColin » Mon Aug 12, 2019 3:50 pm

Many thanks Hugh.
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Re: Professional indemnity insurance

Postby Watchmaker » Mon Aug 12, 2019 4:50 pm

TheColin wrote:I am hoping to join an agency to do some sound design/mixing work, but they require that I possess professional indemnity insurance cover for £1 million.

Interesting. From the US perspective, this is very different. Am I correct in hearing that you are joining an agency and they want you to pay for E&O (another term for PI) ? In the US that's part of the enterprise risk management stack intended to protect the organization from errors made by senior individuals' either through mis-representation, malfeasance or plain getting it wrong though you're the paid expert. My expereince is that an entity buys a blanket policy with a rider for named individuals.

Is it the norm in England to people to pay their own PI premium, or are you a subcontractor?
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Re: Professional indemnity insurance

Postby MOF » Mon Aug 12, 2019 5:16 pm

Are you sure that's not for the public liability insurance?

Apologies I didn’t read that closely enough. Hugh’s right.

Is it the norm in England to people to pay their own PI premium, or are you a subcontractor?

Someone I know in the UK Gas Supply industry took early retirement and thought about doing the odd bit of consultancy work, he too found it to be prohibitively expensive to take out professional indemnity insurance.

I am hoping to join an agency to do some sound design/mixing work

This insurance does sound a bit OTT though. Guaranteeing gas safety is a whole different ball game to getting a client to sign off your work that they’ll then publish or present to their client further up the chain.
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Re: Professional indemnity insurance

Postby Hugh Robjohns » Mon Aug 12, 2019 5:20 pm

Watchmaker wrote:My expereince is that an entity buys a blanket policy with a rider for named individuals.

Is it the norm in England to people to pay their own PI premium, or are you a subcontractor?

If you're employed as a staff member by a company then you would normally be covered by the company insurance, but I think the OP is talking about working on a freelance/contract basis and in that situation it would be more normal for the individual to arrange their own cover.

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Re: Professional indemnity insurance

Postby hobbyist » Mon Aug 12, 2019 7:02 pm

TheColin wrote:Hi all,

I am hoping to join an agency to do some sound design/mixing work, but they require that I possess professional indemnity insurance cover for £1 million. So far the cover I've been offered costs a small fortune! The only affordable professional indemnity insurance was Musicians Union but unfortunately it only covers music tuition situations, so it's no good.

Anyone got any suggestions for professional indemnity insurance providers for sound design and mixing work? - Or unions which provide good discounted PI insurance to members?

Cheers,
Colin

Exactly what are you doing?
If all you are doing is mixing there should just be an E&O policy that is affordable.
If you are truly doing design where someone could somehow get hurt then you need more coverage.

Not sure about UK but in USA many types of design work require a PE license, if it can affect the public. There are many sound contractors doing design work in US without the license but they are still at risk of being sued if someone got hurt.

If you are not getting enough work to make that expense look like petty cash then maybe rethink going through an agency to do it.
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Re: Professional indemnity insurance

Postby James Perrett » Mon Aug 12, 2019 7:15 pm

I was doing some consultancy last year so decided I needed professional indemnity insurance - the sum that I was paid in consultancy more than paid the premium. However, if you aren't advising people or designing something it seems strange that you would need full professional indemnity insurance for the sort of job you are planning on taking on. I'm wondering whether the real issue is that they've had problems in the past with copyright and they want you to indemnify them against any copyright claims.
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Re: Professional indemnity insurance

Postby Hugh Robjohns » Mon Aug 12, 2019 7:19 pm

I guess it all depends what 'sound design/mixing' involves -- it's one of those job descriptions that can mean very different things to different people.

More information please TheColin! ;-)
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Re: Professional indemnity insurance

Postby TheColin » Mon Aug 12, 2019 10:23 pm

Thanks for the comments everyone.

The agency uses a wide range of freelancer types: HR, admin, project managers, app and web designers/builders etc. They have a blanket policy that each freelancer needs £1m public liability insurance and £1m professional indemnity insurance, regardless of role. I think the sound design/mixing work is at the fringe of their activities, hence them not really understanding that this requirement is both overkill and quite hard to acquire for a reasonable cost.

I've done a fair amount of this kind of work in a semi-professional capacity before (polishing audio on talking head videos, creating some backing music - that kind of thing) and never bothered with any insurance, nor was I asked to put any in place until now. But I don't make the rules, and I guess I could be late with my work, cause a project to miss it's deadline and get sued as a result, so some protection does make sense especially when the clients are likely to be big corporates with a team of lawyers on hand :round1: .

Currently, I'm trying to clarify how much work is available, and whether an exception can be made for the sound design/mixing role before I take the plunge and pay upwards for £400 for the cover.
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Re: Professional indemnity insurance

Postby BillB » Mon Aug 12, 2019 11:39 pm

I know a little bit about this. As a landscape architect, business owner and employer (of two people!) we have to have Employer’s Liability, Public Liability and Professional Indemnity Insurance. The last is by far the most expensive, and is there to cover us against claims of negligence as professionals. Haven’t had to call on it in twenty years of trading, and I don’t know of any others who have, although it does happen.

A cautionary tale. We were asked to join a consortium in a bid to work for a local authority. Engineers, architects, landscape architects. The council expected each member of the consortium to have £5m PII cover, for the duration of the 4 year contract, and maintained thereafter for 12 years. We spoke to our PII brokers (specialists who actually do understand what Landscape architects do) and they gave us a premium which would amount to around £50k over the 4 + 12 years. It wasn’t looking worth our while, so the engineers agreed to cover our works under their PII. What we do is considerably less risky than what they do. If we get it wrong, someone might trip on a badly designed step, or eat the wrong plant, or, as the OP said, we might delay someone else’s work. But that is nothing compared to a structural engineer getting it wrong, and there in lies the stupidity of the system. It is not based on reasonably calculated levels of risk, it is based on crudely eliminating all financial risk, in this case from the OP’s agency.

So, we managed to find a way to enter into the contract with the council for the four year term. Guess how much work we got out of it? Nothing at all. So, if the council had its way, we would still be paying off the £50k of premiums that we would have been contractually obliged to, in return for sweet FA.

I tell this story as a warning to Colin. Before agreeing to take out PII, be sure you know how long it will be necessary to maintain cover. And be reasonably sure that you are going to get enough work out of it to make it worthwhile. Good luck!
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Re: Professional indemnity insurance

Postby MOF » Fri Sep 06, 2019 4:27 pm

Just wondering, what did you do?
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