IT consultant insurance is a combination of coverages designed to protect your business from the unique financial and legal risks of the tech industry.

Most states require you to carry workers’ compensation insurance if you have employees. And some clients may require proof of professional liability or general liability coverage before signing a contract. We recommend reviewing both your state regulations and any client agreements to make sure you’re covered.

Standard general liability and professional liability policies typically don’t cover your own business equipment. For that, you’d want to look into inland marine insurance, which is designed to help protect portable business equipment on the go.

General liability insurance typically includes coverage for third-party property damage, like spilling coffee on a client’s desk. However, standard policies usually exclude damage to property you are actively working on (known as the Care, Custody, or Control exclusion). So if you accidentally damage a client’s server or other equipment while you’re installing hardware, you may need a specific endorsement or your professional liability policy may help cover the claim.

Professional liability insurance, also known as errors and omissions, is designed to help cover negligence claims that arise from your professional services. If a client alleges that a mistake during a system configuration or file migration led to lost or corrupted data, professional liability could help cover legal defense costs and damages, even if the error wasn’t yours.

Professional liability insurance can help cover your legal defense if a client sues you for an error that led to a breach. However, for comprehensive protection against data breaches—including ransomware, notification costs, and credit monitoring—you may need specialized Cyber Insurance.

The cost for your insurance coverage is usually determined by:

The type of work you do
Where your business is located 
Your annual revenue
The types of policies and limits you choose. 

Other factors can include your claims history and how long you’ve been in business.

COIs for most insurance policies are available as soon as you purchase your policy. Once available, Simply Business provides instant digital certificate of insurance access through your online account any time of day. So if a client needs proof of coverage, you can pull your COI and send it over in minutes.

This is another scenario where professional liability insurance could help. If a client claims that a software update you installed caused downtime or lost revenue, your policy may help cover any legal costs and resulting settlements.

If you’re thinking of buying IT consultant liability insurance, we recommend having the following information on hand when using our IT consultant calculator:

The state where you do business
Your type of business or trade
Your annual revenue estimates. 

This information can make it easier to get a quote from one of our insurers.