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Help with getting a quote for indemnity insurance
Thread poster: Steph Lewis

Steph Lewis
United Kingdom
Local time: 07:53
Spanish to English
+ ...
Apr 3, 2017

I couldn't find any previous forum discussions on this topic, sorry if it has been posted before!

I'm in the process of setting myself up as a freelance translator, and as a CIOL member I'm looking into getting my professional indemnity insurance with Trafalgar Risk Management through the CIOL Advantage scheme.

I'm just having a little trouble working out what information to enter on the Trafalgar website to get my quote:

Firstly: I'm asked to specify how much cover I need - there's a dropdown list showing amounts ranging from £50,000 up to £2,000,000. I have no idea how much would be normal! Would I be OK to just select the minimum cover of £50k at this stage?

Secondly: there is a box where I'm supposed to enter a figure for my 'estimated annual turnover' - how am I meant to estimate this when I'm only just starting out in business?! I have zero figures to go on as I have no idea how much I will be earning once I'm up and running. What sums can I do, if any, in order to come up with a number?

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Looking forward to reading your suggestions on this - thanks in advance...


 

Mario Chavez (X)  Identity Verified
Local time: 02:53
English to Spanish
+ ...
It's called something else in the forums Apr 3, 2017

Hi, Steph,

The topic has been convered, but under other names, surely:

Professional liability
Errors and omissions
E&O insurance
Professional insurance


I would ask some UK resident translators that are more or less local to you. I'm sure CIOL has a directory, doesn't it?

But before you start sending emails to strangers or making cold calls, consider this: why do you think you need professional liability insurance at this point?

My money is in that you need zero insurance at this point. Have you thought of working as a project manager or as an intern translator (or in-house translator, proofreader or editor) until you get your feet wet enough to go out on your own?

Food for thought.


 

Steph Lewis
United Kingdom
Local time: 07:53
Spanish to English
+ ...
TOPIC STARTER
Not quite what I was asking.. Apr 4, 2017

Thanks for taking the time to reply, Mario, but I'm afraid you haven't really answered my questions.

I should clarify that I've already spent several years working as an in-house translator; I wasn't asking whether I need to purchase this type of insurance (the CIOL Code of Conduct recommends that all members should have it, but regardless I'd rather be safe than sorry).

All I need help with is (a) the amount of cover I am likely to need between £50k and £2m, and (b) what to put down as my estimated annual turnover - if it's even possible for me to enter this information at this early stage.

(Perhaps I could get away with holding off on purchasing the insurance until a few months' time when I should hopefully have a better idea what my annual turnover might be? At the moment I'm not sure I'd be comfortable promising clients that I adhere to the CIOL Code of Conduct when I don't yet have a policy in place... Maybe I'm worrying too much and it'd be OK to wait a little while?)

Sorry if my original post wasn't clear, and hope to hear people's thoughts and suggestions soon.


 

Sheila Wilson  Identity Verified
Spain
Local time: 07:53
Member (2007)
English
+ ...
Impossible questions Apr 4, 2017

Steph Lewis wrote:
All I need help with is (a) the amount of cover I am likely to need between £50k and £2m, and (b) what to put down as my estimated annual turnover - if it's even possible for me to enter this information at this early stage.

Frankly, if you don't know the answer to those questions, however could we know? The first one is unanswerable. This insurance question has been raised so many times since I joined ProZ.com way back in 2007. Every time it was raised, Henry Hinds - a member who is unfortunately no longer with us - asked if anyone knew of anyone who had ever been sued. There had never been a confirmed case, although I believe there was talk of one a little while ago. I myself had insurance for several years but in the end I decided it was no better than pouring money down the drain. So, going on current figures and statistical averages, I'd say that about 20 cents would cover it icon_smile.gif.

And your estimated annual turnover? Surely you have some idea of what you're going to need to have coming in if you're to survive the year? Maybe not this first year as if you're being sensible you'll have some other source of income to tide you over the difficult process of establishing a solid client base. But in later years, surely you have a business plan and targets? I could tell you my annual turnover, but I don't see how it would be relevant.

Maybe I'm worrying too much and it'd be OK to wait a little while?

Have you asked the CIOL why they think it's imperative? I'd start there if I were you. Personally, I think insurance just gives a clear message to clients that they can try it on, and load up the "damages" for a missing comma or whatever. Strangely, it seems to be agencies that demand this insurance, and damages for errors, and yet it should be their responsibility to make the final checks, and then accept the risk of being sued by their own client if they haven't done their job properly. None of my direct clients have ever shown any interest.

Of course, there's always the possibility that I'll be made to eat my words icon_frown.gif. But as a freelancer you're entering into the world of business. The risks of doing business are omnipresent. We all need to reduce them as much as possible - hence I'd never tell anyone NOT to take out insurance - but we also need to accept that there's always going to be risk.


 

Christine Andersen  Identity Verified
Denmark
Local time: 08:53
Member (2003)
Danish to English
+ ...
Are you on Transnet? Apr 4, 2017

Dear Steph

I am not insured under the CIoL scheme, as I don't live in the UK. However, as you are an MCIL, you could ask to join Transnet, which is a Yahoo group for members, and ask there. You would find people who are already insured under the scheme, who would happily give you some advice on that and a great many other things!

Dear Mods: Transnet is a closed group, not a competitor to this site, so I hope you don't need to remove my post.


 

Steph Lewis
United Kingdom
Local time: 07:53
Spanish to English
+ ...
TOPIC STARTER
Thanks for the input Apr 4, 2017

Thanks, Sheila and Christine, for your input and for offering a bit of perspective on this - much appreciated.

The specific wording of the CIOL Code of Conduct is: "CIOL recommends practising professional linguists to have Professional Indemnity Insurance cover". So they don't say it's imperative, they just recommend it - I will try to investigate further. I think I'll join Transnet too, as Christine suggests, and see if I can find out any more information that way.

I have indeed worked out my costs and what I will ideally need to earn, but in these initial stages it's obviously difficult to know exactly how things will pan out and whether those targets will be achievable in reality, or whether I'll need to fall back on other sources of income more than I've planned to. My targets for future years might then change based on how these first few months go. Because of this, I'm not sure if it would be OK to put down my 'target' annual turnover on the form, or whether instead I should stick with an absolute minimum in case I don't do as well as I'd like... Having said all that, I suppose if I'm unlikely to have to make a claim this may all perhaps be a little arbitrary - maybe I can just put what I think is a reasonable estimate based on the lower end of my targets.

Anyway, thanks once again for weighing in!


 

Steph Lewis
United Kingdom
Local time: 07:53
Spanish to English
+ ...
TOPIC STARTER
Oops - how to join TransNet? Apr 4, 2017

A quick additional question - do I need to contact someone directly to ask if I can join TransNet? I can't seem to find it in Yahoo Groups or via Google..

 

Mario Chavez (X)  Identity Verified
Local time: 02:53
English to Spanish
+ ...
Um, well, what can I say? Apr 4, 2017

Steph Lewis wrote:

Thanks for taking the time to reply, Mario, but I'm afraid you haven't really answered my questions.

I should clarify that I've already spent several years working as an in-house translator; I wasn't asking whether I need to purchase this type of insurance (the CIOL Code of Conduct recommends that all members should have it, but regardless I'd rather be safe than sorry).

All I need help with is (a) the amount of cover I am likely to need between £50k and £2m, and (b) what to put down as my estimated annual turnover - if it's even possible for me to enter this information at this early stage.

(Perhaps I could get away with holding off on purchasing the insurance until a few months' time when I should hopefully have a better idea what my annual turnover might be? At the moment I'm not sure I'd be comfortable promising clients that I adhere to the CIOL Code of Conduct when I don't yet have a policy in place... Maybe I'm worrying too much and it'd be OK to wait a little while?)

Sorry if my original post wasn't clear, and hope to hear people's thoughts and suggestions soon.


Sheila and others have tackled the issue with more detail, fortunately. Some parting thoughts:

a) If you've worked as an in-house translator for years, common sense tells me that you could use your annual salary as an average or starting point. Think of it.
b) Perhaps it's the British English interfering in my understanding, but the way you phrased I'm afraid you haven't really answered my questions gives me the impression that I had somehow an obligation to answer your questions if I deigned to offer an opinion. So, I don't know what to say to that.

:\


 

LEXpert  Identity Verified
United States
Local time: 01:53
Member (2008)
Croatian to English
+ ...
Don't sweat the estimates Apr 4, 2017

The insurer understands perfectly well that your first-year numbers as a startup are estimates.
You will probably have to renew the policy each year, on which occasion you will be asked if anything has changed in your circumstances. Then you put down actual figures. They are just trying to gauge your exposure, which will be greater at, say, 500k revenue than 50k. An in-house salary for the same occupation plus perhaps 30% (since you need to pay for your own payroll taxes, pension, medical, etc.) seems like a reasonable, conservative starting point. At typical first-year start-up volumes that figure isn't going to make a difference in your premium - it will be mainly be determined by your coverage level and deductible.

As for the insured amount - that's tougher to answer. I'd say the minimum is the amount of assets you need to protect, and the max is the most you think you might conceivably be sued for. Personally, I think the likely scenario in which a translator might have liability is when a translation error makes it into printed material or onto packaging, and the entire print or production run needs to be redone. The cost in this case is both easily quantifable and attributable to the translator.

Although medical damages can be huge, pharma companies and med. device manufacturers have so many different levels of QC that the odds of a translation error making it very far are slim to none. Medical interpreters probably have more exposure.

While it's tempting to say, "they'll just go after the agency because I don't have any money", there's nothing to stop the agency from coming after you for damages, or an angry client from suing both you and the agency.

Which brings up another important point - liability insurance not only pays out any damages but also pays your legal fees, which alone could be thousands or tens of thousands of dollars if you are sued, even if the suit is baseless and your defence successful.

[Edited at 2017-04-05 09:34 GMT]


 

Chris S  Identity Verified
United Kingdom
Swedish to English
+ ...
My 2p Apr 4, 2017

Mario Chavez wrote:

Um, well, what can I say?


Nothing would've been preferable.

OP: Can't you speak to the insurer? Otherwise, surely it's the most you're likely to earn that they want to know (more earnings = more chances of being sued).

But unless you're very, very unlucky and/or inept you won't ever be sued. I've never had cover.


 

Peter Shortall  Identity Verified
Local time: 07:53
Member
French to English
+ ...
Discretion is the better part of valour Apr 4, 2017

Sheila Wilson wrote:

Personally, I think insurance just gives a clear message to clients that they can try it on, and load up the "damages" for a missing comma or whatever.


This is a very good point. I think if you have insurance, it's best to be discreet about it because if you're not, you're letting any sue-happy people out there know that there is a pot of gold to go after if an opportunity presents itself. I've seen some translators proudly advertising on their profile pages the fact that they have cover, but I have to question the wisdom of doing that. Having insurance doesn't mean that the quality of your work is any better, so why mention it?

That said, I know of at least one agency that requires (not recommends, but requires) that its translators have indemnity insurance, and I have a feeling that this trend may grow over time as agencies increasingly look after number one. They like taking a chunk of the money for each translation we do, but they're not so keen on accepting any responsibility for what they're selling!

As for the amount of cover, I vaguely remember seeing a recommendation of £250k somewhere ages ago, though I've no memory of where I saw that and there isn't really a "right" answer to that question. If there isn't a big difference in the premiums for the different cover limits, I suppose it makes sense to go for a higher amount. If you're going to have cover at all, you may as well have a lot of it if a higher limit doesn't cost much more than a lower one.

For your projected starting salary, perhaps you could look at the CIoL rates/salary surveys if any are available on their website (I haven't checked lately) to give yourself a rough idea of what people make. It's a while since I last looked at one, but if memory serves, I think the average salary tended to be in the range of £20-30k when I checked, though it's reasonable to suppose that a translator who is just starting out will not do as well as that in the first year, without an established client base.

[Edited at 2017-04-04 22:20 GMT]


 

Daryo
United Kingdom
Local time: 07:53
Serbian to English
+ ...
is this some British obsession Apr 5, 2017

to get insurance against anything and everything?

Even after more than 20 years, I still don't get it.

Insuring your home content and then putting the crappiest lock you can find on your front door never seemed much logical to me - putting decent locks on all doors and windows always seemed to me a more rational approach.

Back to the translation business: from the viewpoint of a client what kind of message boasting about "being insured" sends about the translator?

If I was at the receiving end of that kind of talk, I would definitely prefer to hear about some well founded assurances of quality - "having indemnity insurance" would more mean to me: "why should we care about accuracy and quality, given that if we make a mess of our translations our insurance will sort it out anyway" - really comforting when you need to have something translated from or into a language you don't understand a word of! (Or music to their ears for professional litigants)

If you are so worried about protecting yourself against well founded claims (no one will bother making unfounded claims if you don't boast about "having indemnity insurance"), there is a much simpler legalistic device: simply make part of your Terms and Conditions that your liability is any case limited to the invoiced amount - much much bigger businesses do it routinely.


 

Steph Lewis
United Kingdom
Local time: 07:53
Spanish to English
+ ...
TOPIC STARTER
I have a much better idea now Apr 5, 2017

LEXpert, Chris and Peter - thank you all very much for your thoughts. You've been a big help and I'm very grateful!

I take the point that I'm unlikely to actually need to claim on this insurance (and thanks too for the tip about being discreet - no need to advertise the fact I may be easier to sue!). I just think I'll feel more confident about the credibility of my new business if I can tell clients I adhere to the CIOL Code of Conduct. And if, as Peter suggests, more and more agencies may start making indemnity cover a prerequisite, then I'll have the added bonus of being able to satisfy them as well.

The main thing is I now have a much better idea of how to pick my level of cover and how to come up with an initial salary estimate, so that I can get my quote, and as LEXpert says I can then update the figure next year once I've got more concrete numbers.

So, to summarise, thanks again - this ProZ forum is a great resource icon_smile.gif

[Edited at 2017-04-05 09:35 GMT]


 

Mario Chavez (X)  Identity Verified
Local time: 02:53
English to Spanish
+ ...
Some British sound of reason Apr 9, 2017

Daryo wrote:

to get insurance against anything and everything?

Even after more than 20 years, I still don't get it.

Insuring your home content and then putting the crappiest lock you can find on your front door never seemed much logical to me - putting decent locks on all doors and windows always seemed to me a more rational approach.

Back to the translation business: from the viewpoint of a client what kind of message boasting about "being insured" sends about the translator?

If I was at the receiving end of that kind of talk, I would definitely prefer to hear about some well founded assurances of quality - "having indemnity insurance" would more mean to me: "why should we care about accuracy and quality, given that if we make a mess of our translations our insurance will sort it out anyway" - really comforting when you need to have something translated from or into a language you don't understand a word of! (Or music to their ears for professional litigants)

If you are so worried about protecting yourself against well founded claims (no one will bother making unfounded claims if you don't boast about "having indemnity insurance"), there is a much simpler legalistic device: simply make part of your Terms and Conditions that your liability is any case limited to the invoiced amount - much much bigger businesses do it routinely.


In the United States, most translation agencies use their E&O (errors and omissions insurance) as a marketing tool to attract business. In the case of individual translators, getting and paying for E&O (indemnity or professional insurance) makes little sense unless you bid for a government contract.

My best insurance in translation is stating and proving that my writing skills are a tall cut above everyone else.


 

Tom in London
United Kingdom
Local time: 07:53
Member (2008)
Italian to English
Going after whoever is insured Apr 9, 2017

I am UK-based and I haven't got any form of professional insurance as a translator. But I rarely work with UK agencies. Maybe they like you to have insurance so that if anyone gets sued, it's going to be you and not them.

You asked for suggestions; mine is: don't take out insurance. Wait for at least a year and think about it.

[Edited at 2017-04-09 18:50 GMT]


 
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