2014

Must-Know Insurance Policies for Translators

Whether you're a Spanish interpreter or a Russian translator, your translation small business faces liabilities that threaten it on a daily basis.

A miscommunication with a client, a workplace accident, or other scenarios could lead to lawsuits that could end up costing your business tens of thousands of dollars.

Commercial insurance can protect you from many different lawsuits. Each policy covers a specific area of liability, which means you'll need a combination of policies to provide your business with strong coverage.

The six policies your translation business needs to know are…

General Liability Insurance for English, Spanish, French, and Arabic Translators and Other Translation Professionals

Most businesses purchase General Liability Insurance for two reasons. First, many state governments require this insurance for small businesses. In order to qualify to do business or sign certain contracts, your translation business may need this insurance.

The second reason businesses purchase General Liability Insurance is because it protects a lot of basic liabilities and helps ensure that one lawsuit won't sink a business.

General Liability Insurance can cover your legal bills for many third-party lawsuits (i.e., lawsuits from people not employed by your business). Typically, these are lawsuits from contractors, clients, and other people your business interacts with from day to day, like deliverymen, service technicians, and vendors.

General Liability Insurance covers lawsuits where these third parties claim your translation company…

  • Damaged their property.
  • Injured them or created an environment that caused them to be injured (e.g., a slippery floor).
  • Caused an advertising injury (by misusing a trademark, infringing on a copyright, or damaging someone's reputation).

Let's say your business has been hired to translate Spanish to English for an international business deal with a local coffee distributor. While touring the stateside coffee distributor's office, you trip over their computer cable. You're uninjured, but managed to pull down their expensive computer tower, which now lies smashed on the floor.

And now you can be sued for damages. General Liability Insurance can pay for the associated legal costs, including…

  • Lawyer's fees.
  • Court costs for evidence, witnesses, and other incidentals.
  • Judgments and settlements that pay the third party a lump sum for their injuries, damaged property, etc.

Property Insurance for Translation Businesses

Property Insurance reimburses your business and helps it rebuild when its property is lost or damaged by…

  • Winter storms.
  • Windstorms.
  • Rainstorms.
  • Tornadoes.
  • Fire.
  • Theft.
  • Vandalism.

Property Insurance won't cover every storm that could damage your office building, but it does cover many of them. The National Weather Service often gives names to storms. There's no hard and fast rule, but usually, if a storm is named by the NWS, then it is not covered by your Property Insurance. Another way of saying this is that your Property Insurance can usually covers the more moderate, "normal" weather events.

Property Insurance can help your business recover from a burglary, with many insurance companies sending you money in a matter of days. Let's say someone breaks into your office, stealing your computers, tablets, and other office electronics. In order to break in, they smashed the back window and broke open the door.

Property Insurance can pay for damages to your office space and building, as well as reimburse you for the lost and stolen equipment, supplies, and inventory.

Business Owner's Policies: Lower Premiums on Business Insurance

It would be nice to cover a variety of your insurance needs, but only pay one premium.Business Owner's Policies (BOPs) combine General Liability Insurance and Property Insurance into one package that usually offers a discount for qualifying small businesses.

Not all translation businesses can purchase this insurance. Insurance companies offer BOPs to businesses that meet the following requirements. To qualify, a business…

  • Must have fewer than 100 employees.
  • Can't have a large office space, building, working area, or other property that it needs insurance for.
  • Can't need more a year's worth of income insurance with the Business Interruption Insurance.

Some property insurance policies insure your income when you're forced to close your doors because of a covered property event. If a fire burns down your business, Business Interruption Insurance will pay your business its normal income so you can continue to pay your bills, retain your employees, and fulfill other obligation while you rebuild.

Many small businesses easily meet these requirements, including many insureon customers. Fill out our online insurance application, and we'll check to see if you qualify for this coverage and include it as part of your free insurance quote.

Cyber Liability Insurance for Translators

Cyber Liability Insurance (also known as Cyber Risk Insurance or Data Breach Insurance) offers two types of coverage…

  • First Party Response.
  • Third Party Defense and Liability.

As a translation business, you'll most likely only need the first option - First Party Response - but some businesses purchase both policies.

First Party Response pays for the ways your business responds to a cyber attack on its computers. Cyber criminals (aka hackers) try to illegally access your computers in order to find…

  • Bank account data.
  • Private information (Social Security numbers, DOBs, etc.).
  • Credit card information.

By finding this information, hackers might be able to steal money from you or your clients. First Party Response pays for your business to…

  • Investigate the attack (who did it and where your business was exposed).
  • Hire crisis management and additional workers to help you respond.
  • Contact clients, customers, and other people who may be at risk.
  • Hire fraud monitoring and credit monitoring services for anyone whose data may have been breached.
  • Produce new public relations / advertising campaigns to restore your reputation after the attack.

Third Party Defense and Liability, the second Cyber Liability Insurance option, is typically for computer businesses or IT companies that sell products that can be hacked. Companies that make security or network software can be held liable when their clients are hacked. This insurance pays for those lawsuits (which you probably won't face as a translator).

Errors and Omissions Coverage for French, Spanish, Arabic, English, and Other Translation Professionals

Errors & Omissions Insurance (also called E&O Insurance or Professional Liability Insurance) pays for lawsuits over your translation services.

E&O Insurance can pay for lawsuits when your clients sue you for…

  • Mistranslating or misrepresenting them.
  • Making a mistake that led their financial loss.
  • Being negligent in your professional capacity as a translator.
  • Failing to deliver the interpretation / translation services that you agreed to.

Let's say that your business is hired to facilitate a deal between an American industrial lubricant company and a German factory. If the deal falls through, you could be sued if your client thinks you failed to represent them properly. It may just be a case of being caught in the middle and receiving the blame, but regardless of how responsible you are, the lawsuit can cost your business thousands of dollars.

Errors and Omissions coverage can pay for lawsuits and legal expenses that might otherwise overwhelm your business.

Workers' Compensation Insurance for Translation Businesses

Most businesses need to include Workers' Compensation Insurance (also called Workman's Comp or Workers' Comp) as part of their insurance package in order to fulfill their state requirements.

Employers have to purchase this insurance to cover their employees' medical expenses and their own liabilities. Workman's Comp coverage includes…

  • Employer's legal defenses and other lawsuit expenses when employees sue them over a workplace injury or illness.
  • Medical expenses for employees injured at work.
  • Salary for employees who need time to recover before they return to work.
  • Funeral expenses and support payments given to the family / dependents of an employee who was killed at work.

A simple injury like a fall can produce tens of thousands of dollars in expenses for your business. If an employee falls down the stairs and breaks their leg, you would have to pay their medical bills and salary while they recover. The medical bills for injuries like this could reach into the tens of thousands of dollars. If the employee sues you, the legal expenses could easily push the total cost of the accident to $100,000 or more.

Given high medical costs and the expense of lawyers and lawsuits, Workers' Comp is crucial for businesses to avoid the kind of debt that could force them into bankruptcy.

Insureon: Small Business Insurance for Translators

For a free, custom-built insurance quote, fill out a simple online insurance application. It usually only takes a few minutes and you can receive your quote the same day.

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