I signed a contract guaranteeing “First Page Ranking in 90 Days or Money Back.” Google updated its algorithm (AI Overviews took over). I failed. The client wants the refund and damages for “lost opportunity.”
Key Takeaways
- Guarantees are Excluded: Almost every E&O policy excludes “Guarantees and Warranties.” If you promise a specific outcome (#1 Ranking) and fail, that is a business risk, not an insurable error.
- Breach of Contract: This is a pure breach of contract. You promised X, you delivered Y. Insurance usually denies this.
- Negligence Loophole: If you can prove you failed because you made a mistake (e.g., accidentally de-indexed the site), insurance might cover the negligence aspect, even if they ignore the guarantee.
- Refunds are never covered: Insurance pays for damages, not the return of your own fees.
The “Why”: The Warranty Exclusion
The Trap:
Exclusion: “Liability arising from any warranty, guarantee, or promise of performance.”
Insurance covers Standard of Care (doing your best). It does not cover Results (winning).
By guaranteeing a result, you made yourself uninsurable for that specific claim.
The Investigation: I Quoted 3 Major Carriers
1. Hiscox
- My Analysis: Explicit exclusion for guarantees. If the lawsuit cites “Failure to meet guaranteed ranking,” Hiscox sends a denial letter.
2. Next Insurance
- My Analysis: Also excludes warranties. They cover “marketing errors” (like using the wrong keyword), but not failure to achieve a metric.
3. Specialty Broker (Lloyd’s)
- My Analysis: You can buy “Performance Guarantee” insurance, but it is a financial product (like a bond), not liability insurance. It is very expensive and requires auditing.
[IMAGE: Screenshot of “Performance Guarantee” clause in an SEO contract]
Comparison Table: Performance vs. Negligence
| Scenario | Insurable? | Why? |
| “I guarantee #1 Rank” | NO | Warranty Exclusion |
| “I accidentally deleted sitemap” | YES | Negligence |
| “Google changed algo” | NO | Force Majeure / No Fault |
Step-by-Step Action Plan
- Delete Guarantees: Remove “Guarantee” from all future contracts. Use “Best Efforts.”
- Check Contract: Does it limit the remedy to “Refund only”? If so, pay the refund and move on.
- Notify Carrier (Maybe): If the client sues for damages beyond the refund (e.g., “I lost $1M in sales”), report it. The insurer might defend the “Lost Sales” part while ignoring the refund part.
FAQ
Can I ensure a refund?
No. You need cash reserves for that.
Is SEO considered “Professional Services”?
Yes. It is marketing consulting.
What if I used “Black Hat” techniques?
That is “Intentional Misconduct.” Excluded.