Special counsel Arie Kopelman explains how to get coverage that will keep you from losing your shirt when Murphy's law prevails in this excerpt from the Allworth Press book Starting Your Career as a Freelance Photographer.
This article is adapted from Starting Your Career as a Freelance Photographer by Tad Crawford, published by Allworth Press. To purchase the book, visit Amazon, Barnes & Noble, or IndieBound.
Text © Arie Kopelman, 2003. Arie Kopelman is special counsel at the New York City law firm of Greenberg & Reicher, which specializes in the legal problems of photographers and other artists.
Consider this situation: A photographer is informed by his physician that he needs an operation and will be unable to work for three to four months. Upon returning to his studio, he finds a "summons and complaint" (that is, notice of a legal action against him) to the effect that he is being sued for $25,000 for invasion of privacy. The claim is by a model who asserts that the photographer’s client has made an unauthorized use of a photograph that the photographer had taken some five years ago.
Undaunted, the photographer goes into his studio, accompanied by a former associate who trips over a tripod lying in front of the door and severely injures his head. Hearing this commotion, the studio assistant storms over to the doorway to inform the photographer that the person who had broken into the studio the night before had stolen most of their cameras and lenses, as well as the computer, which contained all of the photographer’s tax and business records and client lists.
The photographer is relieved to find out that one of his prize portfolios has not been harmed in the turmoil, since his agent picked it up the day before to show it to a prospective ad agency client. Hours later, the agent duly reports the inevitable. The agency can’t find the portfolio, which had been left for an overnight review.
Surprisingly, insurance coverages, many of them available at reasonable cost, would afford protection in most, if not all, of the situations referred to above.
Finding the Right Insurance Agent
The amount of insurance you will need in any category depends on your personal circumstances. If you add up the cost (or replacement value, where that is what the insurance covers) for all your equipment and it comes to $40,000, then that is the amount to cover.
Similarly, if you earn $50,000 per year, then the insurance to protect that income in case of sickness or an accident should provide for a benefit of about $800 to $1,000 per week. In each case, simply ask yourself what is at risk. What is the minimum amount needed to restore or maintain functionality? Then you will generally know how much coverage to secure.
When seeking insurance, try to deal with an agent whose clients are in business for themselves. That agent will have greater-than-usual exposure to your type of problems. Naturally, the best solution is to find an agent who is already dealing with a few of the other photographers in your area. If you are unable to locate someone on your own, consult with one of the professional societies. For example:
- American Society of Media Photographers (ASMP). 150 North Second Street, Philadelphia, PA 19106, (215) 451-2767, e-mail: email@example.com.
- Advertising Photographers of America (APA). 145 South Olive Street, Orange, CA 92866, (800) 272-6264, e-mail: firstname.lastname@example.org.
- National Press Photographers Association (NPPA). 3200 Croasdaile Drive, Suite 306, Durham, NC 27713, (800) 289-6772, e-mail: email@example.com.
- Professional Photographers of America (PPA). 229 Peachtree Street, Suite 2200, International Tower, Atlanta, GA 30303, (800) 786-6277, e-mail: firstname.lastname@example.org.
If the national headquarters of the organization doesn’t have the information, a local chapter or affiliate can probably help you. Be sure to ask the headquarters office for the organization’s local contact or phone number.
Finally, when you are buying insurance, there are some crucial strategies you must employ to keep the total cost at a level you can afford. These are covered below.
Strategy for Buying Insurance Economically
There are a few key points to bear in mind when buying professional insurance:
- Package purchasing. Get your insurance all at once, and all at the same place, if possible. Many business risks in this field are so unusual they might never be covered if you had to have a separate policy for each (such as invasion-of-privacy insurance, incorporated into "errors and omissions" coverage). But as part of a broad business package, the coverage can probably be secured, and, hopefully, at an affordable level.
- High deductibles. Look for policies in every area with high deductibles; that is, policies where you personally cover the first several hundred or even several thousand dollars of losses. A major cost for insurance companies is the administrative expenses of handling small claims. If you eliminate that problem for them on your policy, you may get a very substantial saving (often in the range of 20 percent to 40 percent). That approach will allow you to get more of the different coverages you need for your business. The money you save by self-insuring for small losses that you can afford allows you to pay for protecting against the really big risks that can kill you.
- High limits. Get the highest coverage you can where the risk is open-ended. For example, on "general liability" policies that cover personal physical injuries you (or your staff) might cause to innocent third parties, you should be covered up to about a million dollars, or possibly more. Jury awards of many hundreds of thousands of dollars and much more are commonplace today.
- Focus on major risks. Focus especially on a situation that could put all your personal or business assets, or your entire income, at risk. One would be the unlimited risks associated with injury to third parties, just mentioned above, that are covered by general liability insurance. Another would be a disabling injury or illness that kept you from working for many years (your income could be replaced by disability income insurance). Obviously, these situations are more fraught with danger than loss of a few cameras or your portfolio. As one New York insurance expert with roots in Iowa put it: "Imagine that your business operation was a farm with cows that give milk. You can afford to lose a lot of milk (your product) and even some of the cows (your tools), but you’re completely wrecked without the farm."
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