Insurance issues are certainly up there among the least interesting, at least at first glance, and most off-putting of issues when negotiating a contract for the commissioning of an art project.  However, there is a troublesome gap in an artist’s ability to obtain insurance coverage in commissioned projects that at best can create huge anxiety and at worst, enormous liability.

Generally, insurance companies will not provide insurance to artists for design-only projects or for the design portion of a project.  If you can find a company willing to provide coverage, it’s crazy expensive and probably not worth it except in absolutely the largest of jobs!  To some degree, it makes sense that there is no errors and omissions coverage (something available to licensed professionals like architects) equivalent for artists, since there is no licensing requirement to becoming a practicing artist.  Thus, there are no standard practices or operating parameters on which insurance companies can rely in calculating their risk.  However, an artist’s inability to obtain coverage can make projects involving design services tricky for everyone involved.

Navigating the awkward territory of designing art works, therefore takes a little bit of creativity and understanding as to how a commission contract works. Understanding the way in which the various contract provisions interact and work together to establish the rules of the relationship is key to artists protecting themselves as much as possible.  By paying close attention to the language in other parts of the contract, some additional security against future liabilities can be attained.

1. Attorney Fee Clauses.  It is important to include the ability to recover reasonable costs and attorney fees for the prevailing party so that in the event you are included in a law suit where the design of the artwork may or may not be the actual issue, you have the possibility of recovering some of the expenses you will incur in dealing with such a situation.  Unless attorney fees are provided for statutorily (ie. there is a law that provides that in your particular type of contract attorney fees may be recovered in the event of a dispute), you must have a clause in the contract that allows for this.  Don’t forget, of course, that this is a double-edged sword and that if you are found to be liable for design defects, you could be held responsible for the same costs and fees for the other party.

2. Assignment.  Pay close attention to the commissioning party’s ability to assign the contract and/or the ownership & responsibility in the artwork.  For property owners, this will likely be allowed so that upon the sale of the overall property, the seller can transfer ownership of the artwork along with the rest of the property.  Make sure that all of the duties and responsibilities to which the original commissioning party is obligated in the commissioning agreement, transfer to the subsequent purchaser of the property.  This can be particularly important in matters of ensuring that future owners are responsible for the proper maintenance of the artwork, which will hopefully reduce the likelihood of any problems and potential liabilities arising from the artwork at any level.

3. Hold Harmless.  If possible, have a hold harmless provision in the agreement that absolves the artist of liability for anything less than cases of extreme negligence or criminal behavior.  This could provide some protection in that the artist would have to be found to have behaved with extreme negligence or intentionally and willfully in creating a problem in order to be held liable.  This will likely be a tough provision to have included, as no one likes giving up the possibility of suing in the event liabilities arise down the road.

4. Limits on Liability.  Again, pretty tough to get into a contract, but maybe worth a try.  Such a provision could limit an artist’s liability to a particular dollar amount; to the value of the initial contract; or to some other reasonably logical number.  This could still be too big a number for the artist to commit to, but it could also be a tool to strike a middle ground and make both parties feel like they’re not completely vulnerable.

   Another possibility would be to limit the time period during which the artist is responsible.  Generally, when fabricating and/or installing a work, an artist must warrant a work for a year (sometimes more) after installation.  When dealing with a design-only arrangement, you could try to include a similar limitation.  In essence, the commissioning party would accept all liabilities for design defects after a designated period of time has passed following the final acceptance of the design proposal.

5. Disclaimer.  Another option may be to establish that if in realizing the design, the commissioning party changes the design in any way at all, the artist is absolved of any liability for damages resulting from the implementation of the design.

   An additional suggestion for reducing liability outside of the contract arena is to limit exposure and/or provide some measure of protection by incorporating.  Take advantage as much as possible of the limited liability that a corporation or LLC provides.  While these business entities may add some paperwork to your pile with additional tax filings and bookkeeping requirements, they can also provide a shield against the loss of your personal assets.

   Though insurance companies cannot be forced to provide coverage, as you can see, some other protective measures can be achieved through business solution available to artists.  Never underestimate the value in taking the time to craft a truly artist-friendly agreement.  Whether deciding how to implement contract revisions, or whether forming a corporate entity is in your best interest, it is always a good idea to seek the advice of a knowledgeable lawyer.