Insuring beyond aesthetics | The risks interior designers face and how to safeguard against them

By Jemima Nomhle Twala and Samiksha Pillay

The world of interior design is often associated with creativity, innovation, and a flair for aesthetics, but only a few realise the risks involved in this profession. From complex commercial projects to highly bespoke briefs, interior designers face a variety of challenges that can lead to costly mistakes.

This is according to Jemima Twala, Claims Specialist at SHA Risk Specialists, who urges interior designers to protect themselves against potential liabilities. "Many designers mistakenly believe their profession is low-risk and that insurance isn't necessary for them. However, legal claims can easily arise from errors such as incorrect specifications or designs that aren't fit for purpose, leading to significant financial losses for both the designer and the client."

Twala explains that professional indemnity insurance is crucial in these situations, as it covers claims of negligence, errors, or omissions in professional services. “For instance, a designer might recommend furniture or materials that are unsuitable for a particular space, or a design may fail to meet building specifications. In such cases, the client may seek compensation, which could have serious financial implications for the designer. Having the right insurance in place helps to mitigate this risk.”

Interior designers frequently collaborate with subcontractors and suppliers, which adds another layer of complexity. Poorly structured contracts or unclear terms can lead to disputes, increasing the designer’s exposure to liability, notes Samiksha Pillay, Claims Specialist at SHA Risk Specialists. “It’s essential that designers ensure their contracts are watertight and that they stipulate the necessary terms and conditions, including indemnification clauses. Without clear contracts, the designer could be held responsible for errors made by subcontractors or delays in project completion.”

The pressure of managing multiple projects simultaneously also presents a risk. Failing to oversee project timelines or quality control can lead to missed deadlines or substandard work. This could result in a breach of contract or claims of unprofessional conduct.

Beyond professional services, interior designers may also be held liable for damages caused to third parties. “Public liability insurance is just as crucial as professional indemnity cover,” says Pillay. “If, for example, a piece of furniture or decor element installed by the designer causes injury to a client or damages their property, the designer could be legally responsible. Public liability insurance protects against such claims, ensuring the designer isn’t personally liable for legal costs or compensation.”

Another potential risk involves the transportation of high-value goods, says Twala. “Many designers transport expensive furniture or materials between suppliers and project sites. In the event of an accident or theft, a Goods in Transit Policy can protect the designer from financial loss.”

Twala goes on to highlight the growing risk of cybersecurity. Pillay adds, “As designers store sensitive client information, the increasing reliance on digital tools makes them vulnerable to cyber-attacks. A simple phishing attack or a data breach could expose client information, leading to reputational damage or even legal claims. A cyber liability policy helps to safeguard against these risks.”

Finally, unpredictable events such as natural disasters or political unrest can severely disrupt business operations. Twala explains, “Natural disasters or fires could damage a designer’s workspace or projects, halting work entirely. Business interruption insurance covers the loss of income during these times and helps to keep the business afloat by covering ongoing expenses like rent and salaries.”

Like any professional, the insurance needs of interior designers vary depending on the scale and complexity of their work. As such, Twala advises designers to assess their risks carefully and choose insurance that aligns with their business model. “Whether it’s professional indemnity, public liability, or cyber cover, having the right protection in place is essential for safeguarding the business.”

While designers are often cautious about over-insuring themselves and incurring unnecessary costs, Pillay concludes that the cost of not having adequate coverage could be far more devastating in the long run. “The key is finding a balance between protecting your business and not overspending on insurance. This is why interior designers should work closely with a professional insurance broker who can assist in acquiring suitable coverage along with necessary extensions for adequate protection.”