This blog post is meant to provide an overview of liability insurance for freelance medical communicators. For advice specific to your situation, seek counsel from authorized experts.
Professional liability insurance is not required for freelance medical writers, but it can be an important safeguard for an independent business.
As business owners, freelance writers may need to acquire insurance policies. Some types of policies are critical for operating a business. Others, like professional liability insurance, depend on a writer’s risk tolerance, client requirements, and the nature of the freelance medical writing business. It is important for those running a business to get legal or financial advice to ensure the business has appropriate insurance coverage.In this blog post, we’ll explain what professional liability insurance is, explore when it may be appropriate for freelance medical writers, address how to evaluate professional liability insurance policies, and discuss additional strategies to protect a freelance business.
What Is Professional Liability Insurance?
Professional liability insurance, also known as errors and omissions (E&O) insurance, protects freelance medical communicators and their businesses from financial losses resulting from errors, omissions, or negligence in their professional services. This includes lawsuits or claims alleging that services provided contained a mistake, were incomplete, or failed to meet contractual obligations, resulting in financial harm to the client.
Coverage may apply to claims involving
- Missed deadlines and failure to complete agreed-on work
- Inaccuracies or work alleged to be inadequate
- Negligence in the performance of professional services
How Freelancers Can Benefit From Professional Liability Insurance
Liability insurance can help protect writers in case of a lawsuit. Real-world examples highlight how quickly disputes can escalate.
In this cautionary tale “3 Common Reasons Why Freelancers Get Sued—It Happened To Me!” the author shares her experience of being sued for breach of contract after missing a deadline. She had informed the client that she had been busy with other writing work. She hadn’t noticed a clause in her contract that stated she was not allowed to work on other writing projects while working for that client.
“As I learned the hard way, it’s easier to sue a single person than it is a company. As an independent contractor, you’re always at risk,” she says.
When Freelancers Should Consider Professional Liability Insurance
When evaluating whether to purchase professional liability insurance, freelance writers should consider business volume, exposure to and tolerance for risk, and whether their clients require it. Since insurance needs differ from one business to another, obtaining professional legal or financial advice can help freelancers make informed decisions about appropriate coverage.
Use of Subcontractors
While freelancing experts and authors of The Accidental Medical Writer Brian G. Bass and Cyndy L. Kryder note that professional liability insurance policies can cost anywhere from a few hundred dollars to several thousand dollars a year, they say it can be critical if freelance writers subcontract work to other writers.
"Subcontracting increases your risk exposure exponentially. As an individual, you are at risk of an error on every project you do. Multiply that by every subcontractor working with you and for every job you do and that every subcontractor does for you. It adds up to a lot of risk,” Bass says.
“For this reason, professional liability insurance will cost a lot more for a freelancer who uses subcontractors than for a freelancer who works alone."
How to Evaluate Professional Liability Insurance Policies
When comparing professional liability policies, freelance medical writers may want to ask questions such as
- Does it cover the work the writer does? For instance, if medical writers are also clinicians, the policy should cover the type of writing services — such as patient education materials or continuing medical education — and not just clinical work.
- What is the insurer’s AM Best rating? An AM Best credit rating evaluates the creditworthiness of an insurance company, indicating the company’s financial strength and ability to pay its claims.
- What is the timing for submitting claims? Usually coverage is when the claim is filed, not when the work is done.
- Is tail coverage included? Also called an extended reporting period, tail coverage can be an add-on, allowing claim reporting after coverage ends. This can be important when switching insurers or at retirement if a claim is made after coverage ends.
- Are defense costs inside or outside of policy limits? “Outside of policy limits” means they are not subtracted from the maximum amount an insurer will pay for a claim, providing more protection if a writer is sued.
- Does the policy address copyright-related claims? This may be important if the writer retains copyright ownership of their work rather than the client.
AMWA always recommends obtaining legal expertise when making decisions specific to your needs.
National professional associations may be a source of professional liability insurance policies tailored to freelance medical writers, particularly for those who are also health care professionals. Although these associations typically do not provide the policies themselves, they may partner with insurance companies that offer coverage to their members.
Freelance medical writers who do acquire professional liability insurance should revisit their coverage annually to make sure it continues to fit their business needs.
Other Ways Freelancers Can Protect Their Business
While professional liability insurance can provide important protection, it is not the only way to manage risk. Freelancers can also reduce their exposure to liability through thoughtful business decisions and planning.
Clear contracts and written estimates are critical tools for setting expectations and reducing liability exposure. In addition to contracts and planning, business structure can also play a key role in managing risk.
Finding Protection in Business Structure
Some experts believe that business structure can be just as important as professional liability insurance. Many freelancers within the AMWA community have shared in discussions in AMWA Engage or at Freelance Jam Sessions that certain business structures can provide a degree of liability protection.
For example, operating as an LLC or an S-corporation helps separate personal and business assets, which can protect personal assets from business-related claims. While no structure eliminates all risk—particularly in cases of personal negligence—these entities may provide an added layer of protection.
More Resources for Your Freelance Business
Whether just getting started or advancing in their careers, freelance medical writers can find guidance on structuring and sustaining a successful freelance medical writing business through AMWA resources, including Expert Tips for Freelance Medical Writing.
These and other educational and professional development tools help writers keep pace with evolving standards in medical communication and strengthen their business practices.
Ultimately, professional liability insurance is just one component of a broader risk management strategy for a freelance business. Thoughtful business structure, clear contracts, and informed decisions about insurance coverage can help protect a freelance medical writing business.
AMWA acknowledges the contributions of Cynthia Saver, MS, RN, for peer review in the development of this AMWA resource.
