PDA

View Full Version : Author's liability insurance



Palmfrond
05-29-2009, 05:37 AM
Does anybody have author's liability insurance? Do I need it? Here's one company that writes these policies:

http://www.firstmediainc.com/products_author.html

Have you heard anything about them?

Ol' Fashioned Girl
05-29-2009, 05:48 AM
I don't know where you live or if you own a home or have renter's insurance... but your liability portion of either of those policies may cover you as a writer. Just to be safe, I added an umbrella policy. The coverage is quite reasonable, but be sure to read the fine print... another positive, it covers you for all lawsuits, not just those related to writing.

Palmfrond
05-29-2009, 05:58 AM
My homeowner's policy has an added umbrella, but both specifically exclude liability related to my business. I checked this with my agent - author's liability is definitely not covered. (Like medical malpractice, it's a separate policy.)

Palmfrond
05-29-2009, 06:46 PM
Nobody has insurance?

Williebee
05-29-2009, 06:53 PM
Nobody has insurance?

Heck no. We're all coming to your house to fall down.

icerose
05-29-2009, 07:14 PM
I've never heard of author insurance to be honest, but then again I haven't had any big works sell yet.

Palmfrond
05-29-2009, 07:36 PM
I guess this is mostly an issue for memoir/non-fiction writers who might face slander/libel suits, but it would also cover suits by nutcases who claim the writer stole their story. Since I didn't steal my story, I'm not worried about *losing* a lawsuit, only about *paying the lawyers* to defend me.

Claudia Gray
05-29-2009, 10:15 PM
I've never really heard of this, nor am I concerned about it. Such lawsuits are rare and unlikely to target any but the most popular authors of fiction, in which case the publishing house is likely to mount the defense. Were I a nonfiction writer who dealt with newsworthy/controversial topics, this might be more of a consideration, but for novelists it just looks like a money drain.

Palmfrond
05-29-2009, 10:21 PM
Thanks, Claudia. If you don't need it, I don't need it either. I wouldn't count on the publisher mounting the defense if it were ever necessary, though. Most boilerplate contracts have a "hold harmless" clause that requires the *author* to provide the defense for the publisher.

CACTUSWENDY
05-29-2009, 10:22 PM
Again, another day of learning something new. I too have never heard of this.

Claudia Gray
05-30-2009, 12:31 AM
Thanks, Claudia. If you don't need it, I don't need it either. I wouldn't count on the publisher mounting the defense if it were ever necessary, though. Most boilerplate contracts have a "hold harmless" clause that requires the *author* to provide the defense for the publisher.

Technically true, but if the lawsuit targets someone who is a very big seller, very popular -- which is usually the case, as lawsuits follow money -- the publisher is going to have a vested interest in keeping that person not only writing but happy. At that point, you probably can afford your own awesome counsel, but I think you could count on massive assistance from the publisher's legal counsel as well.

ajkjd01
05-30-2009, 05:04 AM
Let's also add here that a lot of writers and self-employed people also incorporate. Setting up a limited liability corporation may do a lot that these insurance policies would cover. Would be worth sitting down with a lawyer in your own state to discuss, and consultation fees are generally not to overly outrageous if you're genuinely concerned.

Just another option to consider.

Palmfrond
05-30-2009, 07:33 AM
Regarding incorporation to avoid liability, I found this (http://www.writermag.com/wrt/default.aspx?c=a&id=712):

If you want to incorporate solely to avoid legal liability for your writing, prepare for more disappointment. Most likely, you will not be able to do so. For one thing, your publisher will almost certainly require that you personally provide the warranties and indemnities in your contracts, even if the party signing the contract is the corporation. Second, most states do not allow an individual to escape personal liability for committing defamation or other torts, even if a corporation is the legal "author" of the offending writing.

Medical malpractice insurance (which I am more familiar with) is like this as well: incorporating doesn't protect from personal liability, it just gives the plaintiff another party to name in the suit.

Christine N.
05-30-2009, 02:32 PM
Nope, and I'm with Claudia: I would think it more useful to non-fiction, true life, memoir, biography writing persons.

If you notice, there are a lot of fiction books with this clause in the front: all characters, places, etc...are a work of fiction. So even if an author extrapolates from people they know, it's still fiction. There are some, big names, who probably still have this insurance, but I don't see the need for it for myself (at least at the moment).

Palmfrond
05-30-2009, 06:06 PM
Thanks for the input, everyone. I really didn't want to have to buy more insurance, and if no published authors have it, I probably don't need it either. Yay!

jclarkdawe
05-30-2009, 06:36 PM
I was hoping someone else would have more recent experience then I do.

When EQUINE LIABILITY was published in 2002, both the publisher and I looked into liability insurance. EQUINE LIABILITY uses legal cases where the plaintiff and defendant are all named. (We played around with the idea of changing the names to protect the innocent, but decided against it.) Some of the cases are very negative against one party or the other.

First off, the insurance would not cover copying someone else's work. This would be considered an intentional act, and insurance doesn't cover intentional acts. Nor would the insurance cover having a real person defamed in a novel. Again, this would probably be an intentional act.

The two areas where I saw it likely to provide coverage was if I (or the publisher in editing) misstated a fact. For instance, if I stated that John was reckless in his handling of the horse, where I did not have facts to support said conclusion, and had made the statement in error, the insurance would have covered my damages (maybe).

The second would be where I made a typo in someone's name, so that John Days is described where it should have be John Day. John Days feels insulted that he's listed and sues.

Even where the insurance did provide coverage, it did not seem highly effective. Net result was both the publisher and I decided against it and decided it just made more sense to make sure everything was right.

Best of luck,

Jim Clark-Dawe

ideagirl
05-30-2009, 08:59 PM
I guess this is mostly an issue for memoir/non-fiction writers who might face slander/libel suits, but it would also cover suits by nutcases who claim the writer stole their story. Since I didn't steal my story, I'm not worried about *losing* a lawsuit, only about *paying the lawyers* to defend me.

And that's part of what insurance is for. Check with your insurer (or potential insurer, if you're looking into policies), but if this type of insurance works like most insurance (homeowner's, car etc.), the insurer has a duty to defend you if there's any chance that the lawsuit would be covered by the insurance--i.e. if you have liability insurance that covers you for defamation and someone sues you for defamation, the insurer has a duty to defend, i.e., a duty to pay a lawyer to defend you.

ideagirl
05-30-2009, 09:09 PM
Regarding incorporation to avoid liability, I found this (http://www.writermag.com/wrt/default.aspx?c=a&id=712):

If you want to incorporate solely to avoid legal liability for your writing, prepare for more disappointment. Most likely, you will not be able to do so. For one thing, your publisher will almost certainly require that you personally provide the warranties and indemnities in your contracts, even if the party signing the contract is the corporation. Second, most states do not allow an individual to escape personal liability for committing defamation or other torts, even if a corporation is the legal "author" of the offending writing.

Medical malpractice insurance (which I am more familiar with) is like this as well: incorporating doesn't protect from personal liability, it just gives the plaintiff another party to name in the suit.

I'm not seeing what the connection is between med mal insurance (or any type of insurance) and incorporation. Med mal insurance is taken out either by a doctor (if she's in private practice) or by a healthcare institution (hospital, etc.) on behalf of all the doctors employed by that institution. Insurance does not protect you from personal liability: if you get sued and the person wins, say, a $2 million judgment but you only have $1 million in insurance, that additional $1 million comes out of your pocket. (In the case of hospitals and other institutions, the additional $1 million comes out of the hospital's pocket rather than the doctors, because of the basic principle that an employer is responsible for what the employees do on the job, except for acts that have absolutely nothing to do with their job duties). Usually, though, that doesn't happen; usually people sue you and then settle with your insurance company, not bothering to come after you for your own money. Of course, if you were Donald Trump and your insurance policy wasn't large enough, they might settle with the insurer AND settle with you--i.e. they might get some of your own money--because if they want to they can sue you personally, since you're not shielded from personal liability.

In contrast, and broadly speaking, incorporating frees you from personal liability for whatever goes wrong in the normal course of the corporation's business; for example, if someone falls down in front of your business and sues you, they can't take YOUR money or assets, only your corporation's money and assets. So if you didn't have good insurance (or any insurance) and someone sued after a slip-and-fall at your place of business, they wouldn't get your personal bank accounts or your house, but they might get your corporation's money and the building your corporation owns, or whatever. That's what it means to be shielded from personal liability: only what the corporation owns is at risk, not what you personally own. (There are loopholes in that principle, though.)

ideagirl
05-30-2009, 09:17 PM
Technically true, but if the lawsuit targets someone who is a very big seller, very popular -- which is usually the case, as lawsuits follow money -- the publisher is going to have a vested interest in keeping that person not only writing but happy. At that point, you probably can afford your own awesome counsel, but I think you could count on massive assistance from the publisher's legal counsel as well.

But you wouldn't have a RIGHT to such assistance, due to the hold harmless clause in the contract. And the publisher might not need to keep you happy: if you have a contract that obligates you to produce another two books for that publisher, they've got you on the hook--it's not like you can just flounce off and work for someone else if you're not happy with how they handled the lawsuit.

If you have insurance, however, you are protected in that situation: you have a contract with an insurance company, so you don't have to just take it on faith that the publisher will spontaneously decide to help you out. If you want that protection, you can buy it. If you don't want to buy it, you don't have to--but then you do not have that protection, and your publisher is under no legal obligation whatsoever to provide it for you. To the contrary, YOU are typically going to have an obligation to THEM, under the hold harmless clause and the warranties and indeminifications that you signed.

Here's an article on writers' liability insurance:
http://www.writermag.com/wrt/default.aspx?c=a&id=712

Palmfrond
05-31-2009, 03:56 AM
I'm not seeing what the connection is between med mal insurance (or any type of insurance) and incorporation. Med mal insurance is taken out either by a doctor (if she's in private practice) or by a healthcare institution (hospital, etc.) on behalf of all the doctors employed by that institution. Insurance does not protect you from personal liability: if you get sued and the person wins, say, a $2 million judgment but you only have $1 million in insurance, that additional $1 million comes out of your pocket. (In the case of hospitals and other institutions, the additional $1 million comes out of the hospital's pocket rather than the doctors, because of the basic principle that an employer is responsible for what the employees do on the job, except for acts that have absolutely nothing to do with their job duties). Usually, though, that doesn't happen; usually people sue you and then settle with your insurance company, not bothering to come after you for your own money. Of course, if you were Donald Trump and your insurance policy wasn't large enough, they might settle with the insurer AND settle with you--i.e. they might get some of your own money--because if they want to they can sue you personally, since you're not shielded from personal liability.

In contrast, and broadly speaking, incorporating frees you from personal liability for whatever goes wrong in the normal course of the corporation's business; for example, if someone falls down in front of your business and sues you, they can't take YOUR money or assets, only your corporation's money and assets. So if you didn't have good insurance (or any insurance) and someone sued after a slip-and-fall at your place of business, they wouldn't get your personal bank accounts or your house, but they might get your corporation's money and the building your corporation owns, or whatever. That's what it means to be shielded from personal liability: only what the corporation owns is at risk, not what you personally own. (There are loopholes in that principle, though.)

Having been an obstetrician in my last life, medical malpractice insurance is the kind I know something about. If a doctor is incorporated, the plaintiff in a malpractice suit can sue both the doctor's corporation and the doctor personally; the corporation doesn't protect the doctor from liability for malpractice (although it does for slip-and-fall kind of liability). The plaintiff's lawyer can, and usually does, threaten to come after the doctor's house, in order to pressure the doctor to force the insurance company to settle. Been there, done that, don't want to ever go there again.

ComicBent
05-31-2009, 05:09 AM
America, the nation of lawsuits and insurance companies that will try to take your money while not providing coverage.

Palmfrond, I am a physician, too. Boy, could we ever talk, I am sure. By the way, I have medical licenses in several states. I am trying to remember ... I think it is in Texas where they cannot take your house in a medical lawsuit. Not sure, though.

So ... author's insurance is a new one to me. I will have to look at it when I really need it.

ideagirl
05-31-2009, 09:58 PM
America, the nation of lawsuits and insurance companies that will try to take your money while not providing coverage.


Exactly!! Scumbags.

Cathy C
06-01-2009, 12:23 AM
I think it is in Texas where they cannot take your house in a medical lawsuit.

Yep. Texas homestead law trumps everything. I think it might even trump a Federal tax lien (having been an established precedent here when Texas joined the union.) It's why Texas fared pretty well in the whole mortgage melt-down. 2nd mortgages have only existed here for about the last five years and can only encumber 65% of a home's value (can't loan more than 80% of a homestead, either.)

As for author's liability insurance, I also looked into it as a curiosity point. There's an awful lot it WOULDN'T kick in for, making it the equivalent of buying tornado insurance in Alaska. Yeah, it MIGHT happen, but the odds are really against it. ;)

Palmfrond
06-03-2009, 07:26 PM
Just for interest, I got a quote from an insurance broker. A policy for $1,000,000 per claim/$3,000,000 aggregate (whatever that means) with a $5000 deductible will cost $5900/year. So, that's an easy decision.