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As an IT consultant, you’re a problem-solver, leader, and teacher. You help businesses make important tech decisions, and you’re there every step of the way during installation and implementation. Behind the specifics of your job description, though, there’s a business. Like any other business, you’ve worked hard to build something from nothing. At Simply Business, we’re here to help you protect what you’ve created so that you can focus on what you do best.

Simply Business offers business insurance for consultants to protect all of the time and energy you’ve invested in your business. Not sure what insurance you need? We’ve got you covered. Just answer a few questions about your business to receive free, customized quotes from some of the nation’s most trusted insurance companies.

Plus, it only takes a few minutes to get started.

Three business insurance options available to IT consultants:

• General liability insurance
• Professional liability insurance
• Workers compensation insurance

Each policy covers different scenarios, but all insurance options provide the following benefits:

• It can protect your business from certain claims.
• It can cover damages caused by your negligence.
• Proof of insurance can help clients feel good about your work.
• It may be required where you’re located.

What Types of IT Consultant Insurance Do I Need?

You don’t need to be an expert in business insurance to protect your consultancy. Still, you’re probably curious about the basics. We’ll review the three types of insurance you may need, when they’re typically required, and what they may be able to cover. Let’s get started!

General Liability Insurance for IT Consultants

If you’re looking for a comprehensive insurance plan that could cover a variety of scenarios, then look no further than general liability insurance. This jack-of-all-trades insurance policy covers bodily injury, property damage, and third-party accidents, up to your policy limits. For reference, “third-party” is insurance lingo for your clients or vendors. You also may want to add contents coverage, which could help offset your costs if your equipment is lost or stolen.

What would this coverage look like in your business? Here’s a scenario where general liability insurance could protect you:

Imagine you’re working onsite with a client, installing some new hardware. You’re working in close quarters, and you accidentally drop their laptop. The computer is physically damaged, and your client sues you for the replacement cost.

While we’d all like to have cash buffers to cover whatever life throws at us, the reality is that you never know what to expect. The average claim for property damage or accidents in small businesses is $30,000, and without insurance, you’d have to pay that out of pocket. If you had general liability insurance, your policy could potentially offset those costs and preserve your finances.

So what does general liability insurance typically cover in your IT consulting business? Here’s a recap:

• Third-party property damage (aka clients or vendors)
• Bodily injury
• Medical expenses
• Personal and advertising injury
• And more

General liability insurance for IT consultants does not cover:

• Personal property damage
• Professional services
• Employee injury and workers compensation
• Damage to your work
• Motor vehicles during business use
• Intentional injury or damage
• And more

Professional Indemnity Insurance for IT Consultants

Professional liability insurance isn’t just for doctors or surgeons — consultants benefit from it too. This type of policy protects your business against a negligence claim. A client can sue you for negligence and damages, even if you don’t agree with the claim. Professional liability insurance can cover you if a client claims that you, your employees, or your business were negligent.

While negligence for an IT consultant looks different from a malpractice case for a surgeon, the possibility of being sued still exists. Let’s say you’re advising a client about what you believe to be a best practice. The client follows your advice, but it creates a vulnerability in their firewall. Unfortunately, your client's computer gets infected with a virus, and they sue you for the loss of revenue during downtime.

If you don’t have insurance, you could get legal defense and try to prove you didn’t act negligently. Even without paying for a settlement, you’d still likely be stuck with legal fees. So, businesses that have professional liability insurance could have their costs offset by their policy. Nobody plans on being sued, but coverage minimizes the impact of the “worst-case scenario.”

Let’s review the scenarios that professional liability insurance usually covers:

• Legal defense costs
• Omissions or alleged omissions
• Negligence or alleged negligence
• Claims and damages
• And more

Professional indemnity insurance for IT consultants does not usually protect them from:

• Property damage
• Intentional acts and omissions
• Bodily injury
• Medical expenses
• And more

Learn more about Professional Liability Insurance for IT consultants.

Workers Compensation Insurance

Having employees means you can help more businesses, expand your business, and increase your revenue. However, you gain an insurance requirement when you hire an employee. Most states require you to carry workers compensation insurance if you have part-time or full-time employees. This type of insurance covers medical bills, lost wages, and legal costs associated with an employee who gets sick or hurt on the job.

There’s no such thing as an enjoyable surprise business expense, especially if it involves an injury to one of your employees. The average cost of a workers comp claim is $40,051, which means that the cost of a single accident makes workers compensation insurance worth having.

Workers compensation insurance for IT consulting firms may cover:

• Medical Payments
• Lost Wages
• Rehabilitation expenses
• Death Benefits

Why Should You Get an IT Consulting Insurance Policy?

You do your best work for your clients day in and day out, but a single slip could jeopardize your reputation or business. Business accidents happen more often than you may think. In fact, 43% of small business owners have reported being threatened with or involved in a civil lawsuit. Making mistakes doesn’t make you a bad business owner or IT consultant, though— it just makes you human. Rather than stressing about what may or may not happen, having business insurance can provide security and peace of mind.

We understand that you consider each new business expense carefully. If you’re concerned about the cost of business insurance, you may be relieved to know you likely won’t have to pay for more than you need. Policies and premiums are customized to your business, so you won’t be forced to pay for a one-size-fits-all plan.

Your insurance costs depend on the types of services you provide, your location, how many employees you have, your annual revenue, and more. You can answer a few questions here to get a tailored estimate.

The average costs small business owners are exposed to without insurance include:

• $30,000 for property damage or accident claims
• $39,000 for work injury claims
• $50,000 for reputational harm claims (e.g., slander or libel)
• $20,000 for a client slip-and-fall case

As a business owner, you don’t necessarily have to make a mistake to be faced with a suit. You could be the best IT consultant in town, but a single dissatisfied client could sue you for negligence. At a minimum, you’ll incur legal fees, even if you’re able to prove you weren’t negligent.

Let’s consider the sunny side of business insurance, shall we? While business insurance is there for you on the tough days, it also has benefits for your best days. Here are some things you may be able to do when you’re insured:

• Rent out a room or space for your business
• Convince other people to work with you
• Earn a client’s confidence
• And more!

You’ll receive a certificate of insurance (COI) when you buy your policy through Simply Business, which you can show as proof of coverage.

IT Consultant Insurance FAQs

• Is IT consultant insurance required by law?

  Each state sets its own laws on business insurance, but it is a common requirement. Your free quote from one of our licensed agents considers your location and lets you know what conditions may apply to you.No matter where you live, you’ll most likely need workers compensation coverage if you have employees.

• Is IT consulting insurance tax-deductible?

  We recommend that you talk to an accountant about your state’s tax laws, but typically, business owners can deduct insurance premiums when filing their taxes.

• How much IT consultant insurance will I need?

  You shouldn’t have to pay for more insurance than you need; our quote process suggests coverage levels depending on:

  • The size of your business
  • Your business’s location
  • Your annual revenue
  • And more

  You can talk to our licensed agents if you have additional questions.

• What should I consider before buying IT consulting insurance?

  Getting coverage is simpler than you might think, but the process is even quicker if you’re prepared. Here’s what you should have on hand before getting started:

  • Annual revenue estimates
  • Payroll estimates
  • Information on any previous claims
• Does IT consulting insurance differ by state?

  IT insurance requirements do vary by state. Fortunately, you don’t necessarily need to know your state’s laws to get started. Our quote process and licensed insurance agents can help with processing your quote in the state you operate in.

• What does IT consultant insurance cover?

  A comprehensive insurance product — one that includes general liability, professional liability, and workers compensation — can cover:

  • Bodily injury
  • Accidents and damages
  • Employee injuries
  • Unintentional mistakes
  • And more
• How much does IT consulting insurance cost?

  Our insurance policies are custom-created for your business. Premium prices depend on your services and whether or not you have employees. Pricing is also affected by:

  • Payroll estimates
  • The location of your business
  • The specific services you offer
  • And more

  Want to see how much your IT consultant insurance may cost? Just answer a few questions here to get free quotes and compare different policy prices.

• What if I perform multiple activities as a business?

  If you’re a multi-talented business owner, our licensed agents can help you find the right protection for all of your services.

Why Choose Simply Business?

You put everything on the line to make your business a success, and you should be proud of how far you’ve come. We know you take your business seriously, so we’re serious about helping you protect it. Simply Business is an online insurance platform that makes it easy to compare quotes from top insurers to find your perfect coverage. We’re trusted by thousands of customers to protect their businesses, making us one of the fastest-growing online providers of small business insurance.

What sets Simply Business apart? Well, to put it simply:

• We’re fast and affordable. We know you don’t want to spend all day learning about insurance, so we make the process easy. Getting a quote takes only a few minutes, and you’ll be able to review free quotes right away. Choose the affordable policy that fits your needs, then get back to your busy schedule.

• We’re flexible. Your insurance needs to evolve with your business. We’re here for your first policy or for increased coverage as your business grows.

• We recognize you’re unique. You deserve better than one-size-fits-all policies. Our quote process helps find coverage that’s crafted for you.

You’ve worked hard to build your IT consultant business. Now you can choose the best coverage to protect it.

*Monthly payment calculations (i) do not include initial premium down payment and (ii) may vary by state, insurance provider, and nature of your business. Averages based on July-September 2023 data of 10% of our total policies sold.

This content is intended to be used for informational purposes only. It is not intended to provide legal, tax, accounting, investment, or any other form of professional advice.