Have you ever been sued?

[shift studio]

When I first started my photo-illustration/retouching business, it was recommended to me that I should purchase commercial insurance to protect myself from liability should anyone ever want to sue me (for some mistake where I am at fault).

In the several years since then, I've paid $450+ per year to protect from this kind of issue should it ever arise.

The thing is, I've never-ever-ever heard of someone in this business having legal action taken against them. I'm thinking of cancelling the insurance policy, but before I do, I thought I'd like to hear some opinions from the RetouchPRO members.

Have any of you freelance-types ever been sued, or held financially liable for a mistake? Whats the story, and what was the outcome?

Thanks,
--Shift Studio.

[Markzebra]

What are you expecting to get sued for exactly Shift?

[shift studio]

Originally Posted by Markzebra

What are you expecting to get sued for exactly Shift?

Possibly missing a deadline, maybe some technical mistake (although I can't really think what that would be).

I don't really know. I'm hoping to hear if its ever happened to anyone and why.
If everyone thinks its crazy to pay for insurance, I'd like to hear that too.

--Shift Studio.

[Repairman]

Good question Shift. Like you I've been forking out for donkey's years without needing to make a claim. Small Biz insurance in the UK covers you for a £million or so. I have it in case a client breaks his neck on my premises; I used to have it in case I lost a client's transparencies and would have to pay for a reshoot overseas. The UK isn't quite as litigious as North America and I think you'd be unlucky to be sued. However, I do tell bigger clients that I have full cover insurance; no, the creatives couldn't care less but some of the 'suits' who sign the cheques love that sort of thing. And dare you cancel it?
R.

[shift studio]

Originally Posted by Repairman

Good question Shift. Like you I've been forking out for donkey's years without needing to make a claim. Small Biz insurance in the UK covers you for a £million or so. I have it in case a client breaks his neck on my premises; I used to have it in case I lost a client's transparencies and would have to pay for a reshoot overseas. The UK isn't quite as litigious as North America and I think you'd be unlucky to be sued. However, I do tell bigger clients that I have full cover insurance; no, the creatives couldn't care less but some of the 'suits' who sign the cheques love that sort of thing. And dare you cancel it?
R.

I've never actually told any creatives/clients that I have it. Most of them treat me in a pretty friendly manner, and know and I'm going to do my best for them, but quality work takes time.

Imagine being sued for a fall in my office/home?! Unlikely, but it could happen - boy that would suck.

It was an agency owner that recommended insurance it in the first place - he also told me that guys like me are a 'dime a dozen', and if I wanted to do work for his agency, I'd have to sign on exclusively. I've since realised he said these things to help himself feel superior/dominant/whatever.

okay, more thoughts please - I still don't know if I'd dare
--Shift Studio

[Repairman]

Use anything to get an edge. It does no harm for them to know their arses are covered should you lose their precious prototype gizmo you've been keeping in your office whilst you retouch the bejaysus out of the launch shots! BTW - don't tell customers where you live and they'll never know where to send the possee!
R.

[mistermonday]

I would be less concerned about being late as I would about my dog eating the flash card with the customers only copy of his wedding photos. Language to protect yourself or at least limit your liability should be incorporated into signed contracts / statements of work if you use them, or else on the backside of receipts / claim checks you provide the customer when he hands you his material. I would check the fine print in your insurance contract to see exactly what it covers.
Regards, Murray

[Janko]

Originally Posted by mistermonday

I would be less concerned about being late as I would about my dog eating the flash card with the customers only copy of his wedding photos. Language to protect yourself or at least limit your liability should be incorporated into signed contracts / statements of work if you use them, or else on the backside of receipts / claim checks you provide the customer when he hands you his material. I would check the fine print in your insurance contract to see exactly what it covers.
Regards, Murray

yeah I agree.

I would drop the insurance, and make sure you have terms on your estimates or contracts that would protect you in case someone would be crazy enough to sue you.

As far as someone falling and breaking their neck in your office... maybe you could put grippy rubber all over the floors and padding on all the sharp corners

I'm not sure how tax laws/business licensing work in Canada, but maybe you could incorporate your business- that way it would be its own entity and if someone was to sue you they couldn't go after your personal things outside of your business.

[shift studio]

Thanks Murray and Janko and Repairman.
I do have some clauses on my estimates and invoices regarding a few things, but certainly not everything. I haven't had people sign contracts, and I've done a lot of work without any face-to-face time. I often get approval just via an email or phone call. It sounds like some pretty risky practises but it does have the benefit of facilitating an easy-going, informal relationship based on time-earned trust. I suppose new clients haven't earned my trust, and for some reason I usually give them the benefit of the doubt. I've been burned big once (by a repeat customer).
In any case I could do with a bit more liability-limiting practises in writing and in operating procedures.

Funny you should mention incorporation, I am already incorporated as my former accountant and others recommended it. BUT I am also thinking of closing down the corporation and reviving the 'sole proprietorship' as I used to operate. This is because I'm paying much much more in accounting fees and not really seeing any of a incorporation's benefits. i.e. I pretty much pay myself a salary, nearly equal to the incorporation's net (after operating costs and income taxes). My new accountant says unless the incorporation is carrying over a large sum of money from year-to-year, its not worth the effort and expense. Anyone care to comment on that?

Thanks again you guys, and also, more please. How do you all operate?
--Shift Studio.

[shift studio]

Originally Posted by Janko

maybe you could put grippy rubber all over the floors and padding on all the sharp corners

- and that could save me from my daily bumps and bruises too!

[Lithodia]

Okay well I have a question. If you worked for a company a few years back and used some images you retouched for them in your on line portfolio can they sue you? Given that you never signed anything stating you could not share those images, yet you never signed something saying you could..Also before suing you would they first tell you to take down the images?? I am having a bit of a delima with this...years ago I worked for a company did some nice work for them and recently began showing the work on my site...but now I'm getting a bit nervous.... anyone ever delt wtih this type of situation?

[mistermonday]

Originally Posted by Lithodia

Okay well I have a question. If you worked for a company a few years back and used some images you retouched for them in your on line portfolio can they sue you? Given that you never signed anything stating you could not share those images, yet you never signed something saying you could..Also before suing you would they first tell you to take down the images?? I am having a bit of a delima with this...years ago I worked for a company did some nice work for them and recently began showing the work on my site...but now I'm getting a bit nervous.... anyone ever delt wtih this type of situation?

It's pretty straight forward. If you do not hold the copyright to those images and do not have written permission to use them or their derivatives, you are in violation of the law. Furthermore, if your use of those images violates the agreement that the model signed with the copyright owner, then you arecausing that owner to be in violation of that legal agreement, which would give that company more reason to pursue legal action against you. Whether or not you get any warning depends on the company. Your best approach is to ask for permission, not forgiveness.
Regards, Murray

[Lithodia]

So even if the images are only shown to potential clients its still in violation...hmm it really is a pain especially if your just trying to show what work you are capable of doing.. I really dont want to contact the company for fear of opening myself up to grief..is it possible to just use the images just to show potential clients or is even that illegal... Has anyone you known personally been the subject of being sued for something like this... Just curious about how many people actually do end up going after small time retouchers..

[mistermonday]

Originally Posted by Lithodia

So even if the images are only shown to potential clients its still in violation...hmm it really is a pain especially if your just trying to show what work you are capable of doing.. I really dont want to contact the company for fear of opening myself up to grief..is it possible to just use the images just to show potential clients or is even that illegal... Has anyone you known personally been the subject of being sued for something like this... Just curious about how many people actually do end up going after small time retouchers..

Think about it: You are using some company's copyrighted images to secure business for yourself and assumingly generating some income. That's primarily why copyright laws were written. Violation of those laws for profit put the violator in a worse position.
Regards, Murray

[Lithodia]

Okay so I am just playing devils advocate here, so lets just say you are a retoucher and worked for 10 years at the same company...You decide to go freelance..According to you the 10 years that person spent working on images doesnt matter and tecniqually by law he or she cannot show a single image they have worked on...So what does one do in that situation...just never show any work? I know the law is the law but it does seem there should be some loop hole out there so people can infact show what they had worked on especially if all employers ask for before and after samples. But i appreciate your feedback and will most likely not show any images that may be in question.

thanks

[shift studio]

While Mistermonday's advice is good and technically correct (afaik), its expected in this business that you're going to show your work to prospective clients in your book, and no one is going to fault you for that. Thats my experience but don't quote me. Posting the same work online for all the world to access ... thats another story - better get permission for that.

Personally, I asked my clients, some responded in writing, some responded verbally. I told them that they can assume in the future I may decide to show any new projects without asking. Everyone was okay with it. Again just my experience - its possible you may have clients/projects that this will not be okay.

Right now I have a pseudo-legal note (it likely wouldn't hold up in court) appearing on estimates and invoices stating "All electronic files and composite layouts prior to final, printed or “live” product remain property of Shift Studio Inc. Shift Studio Inc. reserves right to display all images online as a means of promotion unless otherwise specified." This at least tries to cover my butt, inform the client, and give them the option to disallow my use online for self promotion.

Hope this adds some insight and perspective for consideration.
--Shift Studio.

[mistermonday]

Originally Posted by Lithodia

Okay so I am just playing devils advocate here, so lets just say you are a retoucher and worked for 10 years at the same company...You decide to go freelance..According to you the 10 years that person spent working on images doesnt matter and tecniqually by law he or she cannot show a single image they have worked on...So what does one do in that situation...just never show any work? I know the law is the law but it does seem there should be some loop hole out there so people can infact show what they had worked on especially if all employers ask for before and after samples. But i appreciate your feedback and will most likely not show any images that may be in question.

thanks

Suppose I had worked for Adobe for 10 yes developing strategic technology. if I leave for a competitor should I have the right to take some of that intellectual property with me. The answer is no. I was paid to develop it but my former employer owns it. Unless you have an employment agreement in which you negotiated some rights to some IP. If you did not do that, then you may try to negotiate something after the fact. Otherwise you will just need to build a new portfolio from scratch. It's one of life's tough lessons to learn, sorry.
Regards, Murray

[Repairman]

Here's another 2 cents. Personally, I wouldn't feature projects created for a previous employer on my website. At best it's misleading and at worst actionable in court. We all know it's tempting (no haloes here) but it could adversely harm your reputation. You know the web; once it's out there all sorts of nonsense goes on. I even check with my own clients whether it's ok or not to upload samples - just a formality but everyones covered.

[RobertAsh]

Regarding the original question, if you work from home it might be much less expensive to add a rider for your home business to your existing home insurance. At least in the US, our insurance company has a very inexpensive additional expense that covers business liability on premises or even in the field -- for a home-based business.


Regarding company structure, we formed a Limited Liability Company. That provides our business with the corporate advantages of:

• Separating our personal income from business income
• Separating our business liability from our personal liability

...while not subjecting ourselves to corporate double taxation (being taxed once for the corporation and a separate time when the corporation pays us).

It's inexpensive to form an LLC in California but there's an $800 a year minimum tax. If your LLC makes enough that your tax liability > $800 a year then you pay your tax liability instead.

It's worth Googling and seeing if LLCs or equivalents work the same in Canada.