Hi Cliff. Some editorial freelancers do take out indemnity insurance, though many don't. If you don't have the confidence to write terms and conditions that make it clear what "proofreading" entails, and that you are absolutely not responsible for the substantive content of the work, then you probably should seek legal assistance from a professional who can help you with the wording. You mention the term "grade" so I'm assuming you're talking about student work. I can't imagine a scenario whereby a student would get an unsatisfactory grade because of a stray typo. Rather, it would be because the quality of the argument wasn't up to scratch. It isn't the proofreader's job to rewrite the student's work - that would be cheating on the student's part. You would therefore be advised to use your T&Cs to make it clear that you won't assist in plagiarism.
Certainly, your first port of call should be the website of your national editorial society to see what guidance they offer regarding liability and insurance for editorial freelancers, not just with regard to working for students, but clients more broadly.
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