Working for agencies and indemnity insurance
Thread poster: SusieSmith

SusieSmith
United Kingdom
Jan 23

Do you have indemnity insurance?

I have just received an email from an agency I work for occasionally. They have a new agreement they would like all their "vendors" to sign and ask that we consider taking out indemnity insurance. The new agreement states:

"The Vendor shall defend, hold harmless and fully indemnify xxx against any loss,
claims, costs, liabilities, damages and expenses,
whether direct, indirect, economic, financial, consequential or otherwise, suffered or
incurred by xxx or any xxx clients arising from any willful default, negligent,
wrongful or dishonest (including fraudulent) act or omission by the Vendor"

i.e. they are essentially passing on all risk of legal claims to the translator.

Would you take out insurance or stop working for this agency?

What is common practice these days?

Surely the whole point of working for an agency, at a cheaper rate, is for them to act as a shield against such issues with clients?


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Mario Chavez  Identity Verified
Local time: 23:17
English to Spanish
+ ...
I wouldn't Jan 24

Indemnity insurance (or professional insurance, or errors & omissions insurance) for translators only makes sense in two situations:

a) You work with direct clients
b) You work with government entities or large institutions (they usually require indemnity insurance from a variety of vendors, not just translators)


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Sheila Wilson  Identity Verified
Spain
Local time: 04:17
Member (2007)
English
+ ...
Do you want to be sued, insurance or not? Jan 24

SusieSmith wrote:
I have just received an email from an agency I work for occasionally. They have a new agreement they would like all their "vendors" to sign and ask that we consider taking out indemnity insurance. The new agreement states:

"The Vendor shall defend, hold harmless and fully indemnify xxx against any loss,
claims, costs, liabilities, damages and expenses,
whether direct, indirect, economic, financial, consequential or otherwise, suffered or
incurred by xxx or any xxx clients arising from any willful default, negligent,
wrongful or dishonest (including fraudulent) act or omission by the Vendor"

i.e. they are essentially passing on all risk of legal claims to the translator.

I'm sure they'd love all their suppliers to sign it. Who wouldn't?

But why would their suppliers sign something like that? Isn't it simply asking to be sued for a mere typo? Even if it didn't cost me a thing (over and above the premiums) I'd have sleepless nights all through the process to the extent that my health would probably suffer. And all so they can sleep soundly in their beds!?!?! IMO, a freelancer has to accept a certain level of risk all the time - it's part of the way of life and one of the many things that set us apart from employees. I'm willing to take the risk that they won't sue me, largely because it wouldn't be worth their while. I simply don't have enough to give them! Now, if I had insurance and they knew it, that would be different.

BTW: I paid for insurance for five years, then discovered that I'd never been covered for any client who lived outside France (where I lived) - and nowhere near all my clients lived in France. So it was money down the drain anyway.


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Dan Lucas  Identity Verified
United Kingdom
Local time: 04:17
Member (2014)
Japanese to English
I wouldn't Jan 24

SusieSmith wrote:
Would you take out insurance or stop working for this agency?

Susie, I would not work with them, or any agency that demands that you accept unlimited liability. There was a thread about this a couple of years ago, with some interesting comments - indeed, it appears to be the same agency:
https://www.proz.com/forum/business_issues/307637-agency_tc_would_you_accept_this_clause.html

Dan


[Edited at 2018-01-24 16:58 GMT]


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Tomasz Sienicki  Identity Verified
Denmark
Local time: 05:17
Member (2007)
Danish to Polish
+ ...
Agreements are negotiable Jan 25

Would you take out insurance or stop working for this agency?


One should obviously never agree to this sort of clauses.

However, it does not have to be an either-or situation ("take out insurance or stop working"). Agreements are negotiable – translation agencies are not banks. Cross out any liability clauses (as well as any contractual financial penalties when you're at it) and sign the rest of the agreement. My experience tells me that most agencies will respect this and continue to use your services. The only agencies that ever refused to negotiate agreements with me were ones with overly complex administration, lots of paperwork and questionnarires, but hardly any jobs. Not a big loss.


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neilmac  Identity Verified
Spain
Local time: 05:17
Spanish to English
+ ...
Agencia non grata Jan 25

LOL. I won't even work for anyone calling me a "vendor". I reserve that particular lexical item for street sellers of things like peanuts or ice cream...

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Christine Andersen  Identity Verified
Denmark
Local time: 05:17
Member (2003)
Danish to English
+ ...
I have insurance, but would not sign that clause Jan 25


"The Vendor shall defend, hold harmless and fully indemnify xxx against any loss,
claims, costs, liabilities, damages and expenses,
whether direct, indirect, economic, financial, consequential or otherwise, suffered or
incurred by xxx or any xxx clients arising from any willful default, negligent,
wrongful or dishonest (including fraudulent) act or omission by the Vendor"

i.e. they are essentially passing on all risk of legal claims to the translator.

Surely the whole point of working for an agency, at a cheaper rate, is for them to act as a shield against such issues with clients?


I work for agencies at a cheaper rate, because they do a lot of the work I find boring - marketing, negotiating with clients, finding another translator when I am too busy to take on the job, coordinating multi-language projects, preparing files I can work on and all the DTP afterwards... So I can concentrate on translating.

I have an insurance policy that covers several things. I can't remember all the details, but fire, theft and certain computer problems are included in the package along with liability insurance that covers liability for some millions of Danish Kroner.

However, I think it only covers direct loss or expense.
The particular clause you quote does at least mention `... arising from any willful default, negligent,
wrongful or dishonest (including fraudulent) act or omission by the Vendor,´ so they have to prove the act or omission was wilful before they can actually claim any money from you or your insurers.

You do need to read these clauses carefully. I refuse to sign some of them, and get the client to modify them to a realistic level.

I think insurance is worth having, but get it at a reasonable rate through a professional association or check the market carefully. Ask the CIoL or ITI about it in the UK.
And if in doubt, ask the insurers precisely what they cover and what advice they give about these open-ended clauses.
Then you have something to quote to an agency, to show that you are reasonably covered.

I have translated clauses for big companies who limit their liability, so it is totally unreasonable and unrealistic to expect a one-person company to be covered to `defend, hold harmless and fully indemnify xxx against any loss, claims, costs, liabilities, damages and expenses, whether direct, indirect, economic, financial, consequential or otherwise, suffered or incurred by xxx or any xxx clients´ ... unless that is suitably limited.
Do not accept the argument that it will never happen. If it will never happen, then remove the clause from the contract!

You are not liable to everyone remotely connected. The agency also has a certain responsibility to catch errors before they become cripplingly expensive. But a technically very minor error may prove very costly, so I think some cover is definitely a good idea.


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