It was the perfect storm. A wicked strain of the flu knocked me out for ten days right before the Black Friday campaign launch. I missed the delivery date by 72 hours. The client claims they missed the “prime shopping window” and is suing me for $50,000 in projected lost sales. I thought, “I can’t help being sick!” The law—and my insurance—saw it differently.
Key Takeaways
- Sickness is not an excuse: In the eyes of a commercial contract, illness is your problem, not the client’s.
- “Delay in Delivery” Exclusion: Many E&O policies exclude claims based solely on missed deadlines unless the delay was caused by a negligent act (like deleting the files).
- Force Majeure helps: If your contract has a “Force Majeure” clause that includes illness, you might win.
- Projected revenue is speculative: Insurance lawyers are great at arguing that the client’s “projected millions” are fantasy, reducing the claim value.
The “Why”: Professional Services vs. Business Risk
Insurance carriers argue that managing your time and health is a “business risk,” not a “professional error.”
However, some high-quality E&O policies cover “Failure to render services” if it results from an accident or unintentional error.
The Trap: If you simply ghosted the client because you were overwhelmed, that is often uncovered. If you were physically incapacitated, you have a better argument for coverage, but it’s an uphill battle.
The Investigation: I Quoted 3 Major Carriers
I looked for coverage specifically regarding “Project Management” and “Deadlines.”
1. Philadelphia (The Niche Expert)
- The Pros: They offer specific “Miscellaneous Professional Liability” that covers “failure to perform.” They are more understanding of solo practitioner risks.
- The Cons: They often have a minimum premium of
500−500−1,000.
2. Thimble (The Short-Term)
- The Pros: Cheap and easy.
- The Cons: Their policy is designed for damage done. It is less robust when it comes to work not done. If the claim is purely “he was late,” Thimble’s adjusters may deny it based on the contract exclusion.
3. Hiscox (The Balanced Option)
- The Pros: Hiscox covers “breach of duty.” If you can prove that falling ill was an unforeseeable event that caused a breach of duty, they will often provide a defense to mitigate the $50,000 demand.
- The Cons: They will demand medical records.
[IMAGE: Graphic showing a timeline of “Notice of Claim” vs. “Missed Deadline”]
Comparison Table: Deadline Liability
| Carrier | Covers “Failure to Deliver”? | Deductible | Claims Handling | Best For… |
| Philadelphia | Yes (Broad) | $1,000 | Excellent | High-value contracts |
| Thimble | Limited | $1,000 | Fast/Automated | Small gigs |
| Hiscox | Yes (Conditional) | $500 | Good | Solo Freelancers |
Step-by-Step Action Plan
- Get a Doctor’s Note: You need official documentation of your incapacity.
- Review the “Force Majeure” Clause: Check your contract. Does it mention “illness” or “incapacity”?
- Notify the Carrier: Tell them a claim for “Consequential Damages” (lost profits) is coming.
- Do NOT promise to pay the lost revenue: You can apologize for being late, but never agree that you owe them the $50k. Let the insurance adjuster argue that their sales projections were inflated.
FAQ
Does Disability Insurance cover this?
No. Disability insurance pays you part of your income while you are sick. It does not pay the client for their lost sales. You need E&O for that.
Can they really sue for “projected” sales?
Yes, but it’s hard to prove. They have to show historical data. Your insurance lawyer’s job is to poke holes in their math.
Is there a “Deadline Insurance”?
Not really. The best insurance against this is a solid contract with a “limitation of liability” clause that caps damages at the total cost of the project (e.g., $5,000) rather than unlimited lost profits.