Contracts requiring indemnity insurance- just paperwork?
Thread poster: Hannele Marttila

Hannele Marttila  Identity Verified
United Kingdom
Local time: 11:25
Member (2011)
Finnish to English
+ ...
Oct 31, 2013

I think I have received 4 contracts now which require me to take indemnity insurance. The issue is that a freelance contractor shouldn't need to do this but more to the point, all these contracts were such that it would be impossible to get an indemnity insurance.

For indemnity insurance, you need to set the maximum contract value expected, the jurisdiction, details of how any dispute would be handled and the maximum liability expected.

As all of these are from companies that do not guarantee any particular amount of work, contain no details about how a claim would be justified and handled, what the maximum liability would be and additionally, are usually under foreign or undetermined jurisdiction, an indemnity insurance on this basis would be very high indeed.

The translator would need to to take an indemnity insurance regardless of whether the work given would justify it. Every new such contract would need to be legally validated to ensure that your indemnity insurance is valid for it.

It is my view that it is the translation agency's responsibility to have sufficient indemnity cover and completely out of order to require the translator to carry all risk.

I am not signing these. The last, rather naive comment I had was that "we never sue anybody, we just don't use them again if there is a problem, just treat this as paperwork...

Well no, I don't think I can. However low the risk is for the translator producing quality work, the impact and potential costs of a law suit in a foreign court does not bare thinking of. This is an unmanageable risk.


Direct link Reply with quote
 

Peter Shortall  Identity Verified
Local time: 11:25
Member
French to English
+ ...
Not just paperwork Oct 31, 2013

Hannele Marttila wrote:

For indemnity insurance, you need to set the maximum contract value expected, the jurisdiction, details of how any dispute would be handled and the maximum liability expected.


That wasn't my experience. My PII cover was arranged through the ITI, and as far as I can remember, all I had to do was choose was a maximum liability amount and say whether the proportion of my income that comes from clients based in North America was above or below 10%. The IOL offers a similar scheme, though I'm not sure if it covers the US/Canada. Have you looked into either of those schemes?

Hannele Marttila wrote:

The translator would need to to take an indemnity insurance regardless of whether the work given would justify it. Every new such contract would need to be legally validated to ensure that your indemnity insurance is valid for it.


Again, this hasn't been my experience. My policy applies to all work I do.

Hannele Marttila wrote:

It is my view that it is the translation agency's responsibility to have sufficient indemnity cover and completely out of order to require the translator to carry all risk.


Here I sympathise with your view to a large extent. I dislike the idea of agencies taking a share of the money while offloading all of the liability, but what can we do about it? Not work for them, I suppose, or find more direct clients, but that's about it. So far, only a very small fraction of the clients I've worked for require translators to have it, but it wouldn't surprise me if the percentage starts to rise.

Hannele Marttila wrote:
I am not signing these. The last, rather naive comment I had was that "we never sue anybody, we just don't use them again if there is a problem, just treat this as paperwork...


I wouldn't take that advice as gospel! What is that "promise" worth if it isn't written into a contract? And even if the agency never normally sues translators, if one of its clients decides to sue it for a hefty amount, will the agency simply take the hit or will it look to the translator for compensation? I wonder...

One final point: I remember reading somewhere in a discussion about PII that if you have cover, it's best not to advertise the fact, as an important factor in the decision on whether to sue a translator is whether the claim could result in a large payout if successful. If you have, let's say, £250k of cover and your client knows that, then the answer to that question will clearly be yes. And yet I've seen translators proudly announcing the fact that they have cover in their profiles; I have to wonder whether that's wise!

[Edited at 2013-10-31 10:29 GMT]


Direct link Reply with quote
 

Sheila Wilson  Identity Verified
Spain
Local time: 11:25
Member (2007)
English
+ ...
Cross out that clause? Oct 31, 2013

I'm sure you can find an insurance package that doesn't have to be renegotiated for every job for every client - that really wouldn't be workable for any freelance translator I know. And I really don't see that it should be necessary when working through agencies, much less required by them. Have you tried simply crossing through that clause on the contracts? If they have no intention of invoking it then it can't hurt, surely.

There must be times when a freelance translator is better off having some sort of insurance though: when we work directly with end clients. But as Peter says, the translators' associations provide packages.

What you have to be careful of is avoiding buying insurance that has absolutely no worth. I did that when I first started out, with the company I used for all my personal insurances (car, house...). They said it was totally appropriate for everything I did, but it turned out not to be the case. When I'd been paying for years I discovered that I could only get protection when dealing with clients in my country of residence. As I have clients all over the world, it was totally worthless to me. Fortunately, I never had to make a claim! When I moved to Spain, I made enquiries and discovered that most policies here are Spain-only.

As someone (can't remember who) always asks when this topic is raised, has anyone, anywhere, ever heard of a freelance translator needing this type of insurance? And if not, why should we pay the premiums? I do wonder whether Peter isn't right when he suggests that agencies will only bother to sue those who have insurance.


Direct link Reply with quote
 

John Fossey  Identity Verified
Canada
Local time: 06:25
Member (2008)
French to English
Cross it out Oct 31, 2013

Hannele Marttila wrote:

I think I have received 4 contracts now which require ...


Like any "proposed" contracts, just cross out any parts you are not comfortable with, sign and return. 99 times out of a hundred there will be no protest.


Direct link Reply with quote
 

Bernhard Sulzer  Identity Verified
United States
Local time: 06:25
English to German
+ ...
validity of contract Oct 31, 2013

John Fossey wrote:

Hannele Marttila wrote:

I think I have received 4 contracts now which require ...


Like any "proposed" contracts, just cross out any parts you are not comfortable with, sign and return. 99 times out of a hundred there will be no protest.


In a contract signed by both parties, nothing should really be crossed out.
At least I would expect both parties having seen and signed the contract after any parts were crossed out or deleted in order to get the change acknowledged and validated. I'd be very careful!

B

NB: your are the provider of the services, and the client needs to abide by YOUR terms. I wouldn't even consider working for them. I have them co-sign my order contracts, not contracts and terms they come up with. I understand if you think you depend on such clients. But I wouldn't want to.


[Edited at 2013-10-31 21:36 GMT]


Direct link Reply with quote
 

Hannele Marttila  Identity Verified
United Kingdom
Local time: 11:25
Member (2011)
Finnish to English
+ ...
TOPIC STARTER
Thank you all Nov 2, 2013

For John and Sheila, crossing out parts of contract is dicey. Bernhard, I agree, unless you are a lawyer. Additionally, at least one of these contracts was sent as a pdf with a separate acceptance form. Sheila, the translation agency may have no intention of invoking the contract but then, they still might and have the legal right to do so if you have signed the contract.

"What you have to be careful of is avoiding buying insurance that has absolutely no worth. I did that when I first started out, with the company I used for all my personal insurances (car, house...). They said it was totally appropriate for everything I did, but it turned out not to be the case. When I'd been paying for years I discovered that I could only get protection when dealing with clients in my country of residence. As I have clients all over the world, it was totally worthless to me. Fortunately, I never had to make a claim! When I moved to Spain, I made enquiries and discovered that most policies here are Spain-only."

by Sheila is important. My point is that to ensure that the insurance you buy is actually worth it is v difficult. The main point here is that there is no one size fits all - every contract of this nature is different and Peter, I do not quite trust that these insurances would cover any contract. E.g., some wordings have made me liable for indemnifying all the employees of the translation agency - this is not as unusual as it sounds, and the legal advice is to get work elsewhere.

Peter, I haven't looked at the indemnity insurance available from the sources you mention. My issue is that it would be nigh impossible to estimate what my exposure would be next year and whether I do 10% more or less work for the US or Canada. Additionally, I might be paying a hefty insurance amount for work that doesn't even materialise.

As you all say, it is unlikely that you would be sued anyway but it might happen under certain circumstances even if they know you haven't got cover. And it might just be that a customer used a wrong word which you translated correctly but which meant they lost a 10 million contract... this claim might expose the translation agency for bankruptcy so they swiftly turn it to you having signed the contract. They know you can't pay but this would take time and in the meanwhile, you are sued in a foreign court well....


Direct link Reply with quote
 

Sheila Wilson  Identity Verified
Spain
Local time: 11:25
Member (2007)
English
+ ...
There will always be an element of risk Nov 2, 2013

Hannele Marttila wrote:
For John and Sheila, crossing out parts of contract is dicey. Bernhard, I agree, unless you are a lawyer. Additionally, at least one of these contracts was sent as a pdf with a separate acceptance form. Sheila, the translation agency may have no intention of invoking the contract but then, they still might and have the legal right to do so if you have signed the contract.

Absolutely. That's why I would never sign such a contract. When I talked of crossing through part of the wording, I'm assuming that the other party will countersign to say they accept my change. I would never work with a client who isn't prepared to discuss things anyway. I'm not interested in a "partnership" which involves them firing off bit of paper to me and expecting them to be returned in another language, without so much as a "Good morning".

it might just be that a customer used a wrong word which you translated correctly but which meant they lost a 10 million contract... this claim might expose the translation agency for bankruptcy so they swiftly turn it to you having signed the contract. They know you can't pay but this would take time and in the meanwhile, you are sued in a foreign court well....

For me personally, that's the area of risk that I'm prepared to accept. Frankly, a freelancer who worries about every little "What if?" scenario might be better off finding a salaried job. You can never take all the risk out of being self-employed. Once you've protected yourself against all the more foreseeable ones (and insurance cover is far from the only way to do that), you've done all you can. That's how I run my business, in any case.


Direct link Reply with quote
 
Theo Bernards  Identity Verified
France
Local time: 12:25
English to Dutch
+ ...
Spot on, astute observation Nov 2, 2013

Peter Shortall wrote:...

One final point: I remember reading somewhere in a discussion about PII that if you have cover, it's best not to advertise the fact, as an important factor in the decision on whether to sue a translator is whether the claim could result in a large payout if successful. If you have, let's say, £250k of cover and your client knows that, then the answer to that question will clearly be yes. And yet I've seen translators proudly announcing the fact that they have cover in their profiles; I have to wonder whether that's wise!

[Edited at 2013-10-31 10:29 GMT]


I have always wondered how gullible some freelance professionals seem to be...


Direct link Reply with quote
 

Peter Shortall  Identity Verified
Local time: 11:25
Member
French to English
+ ...
Estimating exposure Nov 3, 2013

Hannele Marttila wrote:

Peter, I haven't looked at the indemnity insurance available from the sources you mention. My issue is that it would be nigh impossible to estimate what my exposure would be next year and whether I do 10% more or less work for the US or Canada. Additionally, I might be paying a hefty insurance amount for work that doesn't even materialise.



I was asked to tell them my exposure over the previous 12 months, not the next 12 months. They assume (rightly or wrongly!) that next year's percentage will be roughly the same.

PS If you're a member of the IOL or ITI, the amount shouldn't be hefty at all. Depending on what level of cover you want, I doubt you'd pay much more than £100-150, and quite possibly less than that, which for 12 months isn't really a lot. If you aren't a member and don't want to become one, I don't know what it would cost but there's no harm in asking if you're curious.

[Edited at 2013-11-03 12:25 GMT]


Direct link Reply with quote
 

Łukasz Gos-Furmankiewicz  Identity Verified
Poland
Local time: 12:25
English to Polish
+ ...
Anything which is in a contract is capable of being enforced Nov 3, 2013

Unless it violates the law so much that a judge would strike it. If you can't seriously accept to be bound by it, don't sign it.

Direct link Reply with quote
 


To report site rules violations or get help, contact a site moderator:


You can also contact site staff by submitting a support request »

Contracts requiring indemnity insurance- just paperwork?

Advanced search







Anycount & Translation Office 3000
Translation Office 3000

Translation Office 3000 is an advanced accounting tool for freelance translators and small agencies. TO3000 easily and seamlessly integrates with the business life of professional freelance translators.

More info »
PDF Translation - the Easy Way
TransPDF converts your PDFs to XLIFF ready for professional translation.

TransPDF converts your PDFs to XLIFF ready for professional translation. It also puts your translations back into the PDF to make new PDFs. Quicker and more accurate than hand-editing PDF. Includes free use of Infix PDF Editor with your translated PDFs.

More info »



Forums
  • All of ProZ.com
  • Term search
  • Jobs
  • Forums
  • Multiple search