Project managers, programmers, designers: even the best of them can have a bad day occasionally. In most cases, problems can be fixed and projects can get back on track. But what about that small minority of cases where the client declares ‘enough is enough’? Even worse, what happens when legal action is on the cards?
More of us are working for ourselves than ever before and the UK has the fastest growing rate of self-employment in Western Europe, according to the latest official figures. Going it alone can have its advantages in terms of independence and flexibility – but one of the drawbacks is the possibility of being left holding the baby when things go wrong.
What are the risks faced by someone who’s self-employed in the technology sector? How can these risks be reduced? We take a look…
What can go wrong?
Here are some of the areas where problems can arise:
Errors and omissions. Quite simply, you’ve made a mistake (although there may be a dispute over the severity of that mistake and the extent to which it has caused your client to suffer loss)
Latent faults. A problem only arises some time down the line from when the work was done.
Time limits. The client claims that a failure to complete the project on time has resulted in loss. Was time of the essence according to the contract? Disputes often turn on the reasons for the delays; was it neglect on the part of those working on the projects? Was it due to unforeseen circumstances? Perhaps the client insisted on additional modifications mid-flow and this put the deadline back?
Am I being ‘reasonable’?
To help shield yourself from claims further down the line, pay careful consideration to your contract at the outset. Look carefully at risk; i.e. what are the likely consequences if things go wrong? Creating a check out page for an e-commerce site may be something you can do in your sleep – but what are the implications for that site’s revenue in the event of an error? The higher the risk, the tighter you’ll want to define your obligations and liabilities. If necessary, take legal advice before entering into the contract.
What’s expected of any professional is that they act in a way that would be expected of a reasonably competent person working in that particular niche. With some jobs (e.g. doctors, accountants, lawyers), courts have a pretty good idea what’s reasonable and what’s not – mostly because those jobs have been around forever. But what if your specialism is Adwords or online reputation management? There’s a danger of a court failing to understand what it is you actually do – let alone whether you’ve acted reasonably.
What’s good practice in many tech spheres changes on an almost weekly basis. With a grey area comes the danger of a client seeking to bring a speculative claim. One danger is of a client focusing on what may be a relatively minor omission and arguing that the error is the sole reason why their online presence hasn’t set the world alight. The claim may be baseless – but you’ve still got the hassle of dealing with it (without the luxury of a client relationship manager or an in-house legal team to take the flack).
How can I protect myself?
Manage expectations. This starts before you even have any contact with individual clients. By all means sell yourself on your website and profile – but avoid promising the earth and remember that inflated claims increase the risk of setting yourself up for a fall. When it comes to the pitch, be clear about what you can deliver, how and when. Keep this up throughout the project.
Keep a paper trail. Maintain a log of what you’ve done. Follow up meetings with written communications confirming what exactly you’ve agreed with your client (especially where the project diverts from its original path). Many claims turn on what was – or wasn’t agreed between the parties. Paperwork helps eliminate uncertainty.
Consider insurance cover. As well as offering protection for when things go wrong, professional indemnity insurance enables you to put the dispute in the hands of professionals at an early stage – saving you time and hassle. Being able to say you’re covered is a strong trust indicator; it demonstrates you are serious about the work you do and coverage is often a pre-requisite for being chosen to do work for some organisations (especially for higher-end work).
A dispute sometimes cannot be avoided. Being prepared means a claim – (or the threat of a claim) isn’t the end of the world.
Bluefin is one of the UK’s leading independent insurance brokers, providing specialist insurance and risk management services to individuals and businesses. It provides market leading insurance solutions delivered locally through a network of 42 offices and over 1400 staff.