I felt the blood drain from my face when the client called from the trade show floor. “The QR code goes to a dead link,” he screamed. “We printed 20,000 of these, and the show starts in an hour.” He wasn’t just asking for a fix; he was demanding I pay the $15,000 printing bill and the cost of the rush stickers they were applying by hand.
Key Takeaways
- “Rectification Costs” are rare: Standard E&O pays for lawsuits. It often does not pay for the cost of re-printing physical goods unless you have a specific endorsement.
- The “Tangible Property” Exclusion: Most policies exclude damage to physical property. You need to ensure “financial loss” includes the cost of useless inventory.
- Proofing Sign-offs matter: If the client signed a “Final Proof,” your liability drops significantly, but you still need defense costs if they sue.
- Speed is critical: Some carriers have a “Crisis Management” budget that can deploy funds within 48 hours to fix a PR disaster.
The “Why”: The Cost of Goods vs. Defense Costs
This is the most common misunderstanding in graphic design insurance.
Scenario: You make a typo. The client sues you for $20,000 (the cost of the brochures).
The Insurance Trap: The carrier says, “We defend against negligence. However, we do not cover the restitution of fees or the manufacturing costs associated with your error.”
Basically, they might pay for a lawyer to say you aren’t liable because the client signed the proof, but they hate paying for the actual paper and ink. You need a clause called “Rectification Coverage” or “Faulty Workmanship Correction.”
The Investigation: I Quoted 3 Major Carriers
I specifically asked agents about “paying for the reprint” rather than just “defense.”
1. Travelers (The Printer’s Choice)
- The Pros: Travelers has deep roots in the printing and publishing industry. Their “Printers E&O” specifically anticipates the cost of wasted paper/materials.
- The Cons: Their underwriting process is old-school. I had to fill out a PDF application; no instant online quotes here.
2. BiBERK (Berkshire Hathaway)
- The Pros: Highly efficient online system.
- The Cons: In my analysis of their specimen policy, the definition of “Damages” explicitly excluded the “cost to correct, re-perform, or complete” the work. This means they’d defend the lawsuit, but they wouldn’t write a check for the reprint bill.
3. Chubb (The Premium Option)
- The Pros: Chubb is the gold standard for “Rectification Expenses.” If you notify them of a critical error that could lead to a lawsuit, they sometimes pay to fix the mistake (reprint the brochures) just to avoid the lawsuit altogether.
- The Cons: Minimum premiums are often $1,500+ per year.
[IMAGE: Comparison chart of “Rectification Coverage” clauses between Chubb and a generic carrier]
Comparison Table: Reprint Coverage
| Carrier | Reprint Costs Covered? | Proofing Requirement? | Cost | Best For… |
| Travelers | Yes (Specific Endorsement) | Strict | | Print Designers |
| BiBERK | Likely No (Defense Only) | N/A | $ | Digital Designers |
| Chubb | Yes (Rectification) | Flexible | | High-End Agencies |
Step-by-Step Action Plan
- Pull the “Signed Proof”: Find the email where the client said “Approved for Print.” This is your primary shield.
- Mitigate Damages: Can a sticker fix it? Can the URL be redirected? Do this immediately. The law requires you to minimize the loss.
- Check Policy for “Rectification”: Search your policy PDF for the word “Rectification.” If it’s there, call the carrier immediately. They may fund the reprint to avoid a bigger claim.
- Silence: Do not offer to pay for the reprint out of your own pocket yet. That is an “admission of liability” and interferes with the insurance process.
FAQ
The client signed off on the proof. Am I still liable?
Legally, you have a strong defense. However, the client can still sue you for “professional negligence,” arguing that a “competent professional” would have caught the error regardless of the sign-off. Insurance covers the cost to argue this in court.
Does General Liability cover this?
No. General Liability covers physical damage (e.g., the delivery truck crashed). It does not cover economic loss caused by a typo.
What if the printer made the mistake, not me?
Then the liability is on the printer. But the client will sue you because you managed the project. Your insurance will defend you and then subrogate (sue) the printer to get the money back.