You can spot a vulnerability in thousands of lines of code. You can resurrect crashed servers. You can recover lost files.
You’re a pro at dealing with unexpected events for your clients. But there is no shortage of risks and hazards to your own business that you may not be prepared for. Not to worry. Business insurance can provide the system patch you need.
This guide will walk you through a few basic insurance coverages, demonstrate how they can benefit an IT consulting business, and help you choose what you need quickly and easily.
The If-Then Guide to Coverages for IT Consultants
Professional Liability Insurance
If you’re accused of negligence, a mistake, oversight, or poor performance by a customer (even if you’ve done nothing wrong), then this insurance can help cover claims and legal costs to defend yourself.
Professional liability insurance is also known as errors and omissions (E&O) insurance. It’s designed to protect you against claims of negligence, errors, or omissions in your professional services that result in financial loss, data breach, or operational disruption for your client.
For instance, if you implement a new software system that causes a client’s network to crash, leading to significant downtime and lost revenue, then professional liability can help cover legal defense costs and potential damages. Or if a client claims your network security recommendations were inadequate, resulting in a data breach, then professional liability may protect you from the ensuing legal claims.
Cyber Liability Insurance
If you handle sensitive client data, or store information digitally, then you should consider cyber liability insurance.
This coverage helps handle costs associated with data breaches, cyberattacks, and other digital risks. This typically includes expenses for customer notification, credit monitoring, legal fees, regulatory fines, and public relations.
If a hacker gains access to your systems and compromises stored client data, then cyber liability insurance can help cover the costs of finding and fixing the breach, notifying your clients, providing credit monitoring, and more. Another way cyber insurance may be able help is if a ransomware attack locks down your business’s network, then your coverage may help with recovery costs and potential business interruption.
General Liability Insurance
If there’s a chance of accidentally damaging property or causing bodily injury to a customer within the course of your business, then you should consider general liability (GL) insurance.
You may think insurance that covers accidents or property damage to someone else’s property wouldn’t be important for an IT consultant, but consider this: One of your clients slips and injures their head while visiting you in your office. A few weeks later, your client is suing you for medical bills and emotional damage.
If you’re visiting a client and you accidentally spill your soy latte on their laptop, then your general liability policy can help cover the repair or replacement costs.
Here’s something else to consider. General liability also can cover instances of personal or advertising injury, such as claims of stolen ideas, invasion of privacy, libel, slander, and copyright infringement related to advertising.
Business Owner’s Policy (BOP) Insurance
If you want to financially protect an office, warehouse, or other business location, as well as have general liability protection and coverage for an interruption to your business, then a business owner’s policy may be best for you.
A business owner’s policy is a combination of several other policies. It typically includes general liability, commercial property insurance, and business interruption insurance into one package, often at a lower cost than buying those policies separately.
Along with general liability (just mentioned above) a BOP includes commercial property insurance to protect your owned or rented business space and its contents (office furniture, computers, servers, networking gear) from fire, theft, or vandalism.
If there’s a fire in your office building and your server rack is destroyed, then your business owner’s policy can help cover replacement costs. Or if your office is burglarized and laptops and other IT equipment are stolen, then BOP coverage can help with the costs to replace that essential office equipment.
The third part of a BOP is business interruption insurance. If your business is forced to close after a fire (as described above) or another covered incident, this coverage can help compensate for any typical income you might have lost.
Workers’ Compensation Insurance
If you have full- or part-time employees, then you may need workers’ compensation insurance, because nearly all states require it by law.
Workers’ comp can cover medical expenses and lost income if an employee gets hurt or sick while on the job. It also can financially protect your business from lawsuits that could be filed by an injured worker.
If an employee develops carpal tunnel syndrome from extensive computer work, then workers’ comp can cover their medical treatment, rehab, and lost wages. Or if an employee is injured in an automobile accident while traveling to a client’s office site for a business meeting, then workers’ comp can help cover medical costs, lost wages, and more.
If you’re the one who does it all for your business, this coverage can provide workers’ comp benefits if an accident or an injury puts you out of action. You can find out more here.
The Certainty of Uncertainty
As an IT consultant, you’re likely no stranger to fluctuating economic conditions, changing client needs, and rapid technological advancements. Knowing your business is financially protected from a variety of risks can feel like a reboot for your peace of mind.
The Assurance of Insurance
That’s where we come in. We’ve insured more than 1 million small businesses worldwide. We know how much owners such as you value the peace of mind the right coverage can provide. We also know how to take the hassle, confusion, and time commitment out of the insurance buying process.
With just one online form and 10 minutes of your day, we can help find the coverages you need from trusted insurers who specialize in protecting small businesses like yours. You can choose what works best for you and your business. In fact, you can get started right now, right here. We’re certain about that.
Looking for more information about business insurance? We specialize in that, too. Here is some information we recommend:
What is Professional Liability Insurance? A Guide for Small Business Owners