Buy IT Consultant Insurance

IT consultant insurance is a type of insurance coverage designed to protect IT consultants and their businesses from financial losses due to a variety of risks, including liability claims, property damage, and loss of income.

This insurance typically includes coverage for errors and omissions, professional liability, and general liability. It may also include coverage for data breaches, cyber attacks, and other digital risks.

The goal of IT consultant insurance is to provide financial protection for the consultant and their business, so they can continue to operate and provide services to clients without interruption.

The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small IT consultants ranges from $27 to $39 per month based on location, size, payroll, sales and experience.

IT consultants need insurance for a number of reasons. Firstly, it helps to protect them financially in the event of a claim being made against them. For example, if a client alleges that the IT consultant's work caused damage to their business, the insurance policy would cover the cost of any legal fees and damages awarded. This is especially important as IT consultants often work with sensitive data and systems, which could be vulnerable to cyber attacks or other forms of damage.

Additionally, IT consultants may also be required to have certain types of insurance in order to secure contracts with clients. Many clients will only work with IT consultants who can demonstrate that they have the necessary insurance coverage to protect against any potential risks.

Finally, insurance can also provide IT consultants with peace of mind and a sense of security, knowing that they are protected in the event of any unexpected events or incidents. Overall, having insurance is an important risk management tool for IT consultants, helping to protect their business, finances, and reputation.

IT consultant insurance protects the business from the exposed risks that crop up in the everyday operation of your business.

Errors and Omissions Insurance for IT Consultants

As an IT consultant, you know that your clients expect you to perform at a level of expertise that is standard in the industry.

The client can end up suing you for non-delivery of services rendered or promised and for negligence arising from any advice that you give them. Some potential errors and omissions claims often arise from:

• Designing a network with serious deficiencies instead of the promised network
• Performing backup that leads to data loss for the client
• The design of a network that is vulnerable to an attack by a virus or a hack by criminals
• Failure to complete a project as established by a contract
• Exceeding the time length provided for the project or going outside the project's budget

General Liability

This type of insurance offers broad protection for the business from any claims of damage to from third parties, including both property damage and bodily injury claims. For example, if an employee causes damage to a customer's computer system while providing services at a client's place of business, he subjects himself to claims of damages that result. In this instance, the commercial general liability policy kicks in and pays.

Similarly, if a delivery person, vendor, or a client falls on the premises, then your policy will pay for any related costs and medical expenses if a claim results from the event.

Your perils as an IT consultant are not limited to these instances; there are many more. Even when a claim is unsubstantiated against you, you still need to provide a defense in court when a claim is lodged. Court costs, attorney fees, and any judgments against you can devastate your business' finances. With a policy in place, the computer consultant can rely on his insurance policy to protect them and pay any expenses related to any lawsuits that are filed, up to your policy limits.

This type of IT consultant insurance policy can also provide a buffer of protection against any copyright infringement claims, libel claims, slander accusations and similar occurrences.

Insurance is important whether you lease your business space, own the building, or work from home. Protection is vital, since it protects the business not only from liable claims, but also for damage to your building and the contents of the building, including any office equipment, fixtures, supplies, and computers. Whether the damage results from weather, fire, vandalism, theft, or other covered causes, your insurance is your protection from financial ruin.

Most policies for IT consultants also provide for coverage of costs when your business operations are interrupted. For example, if your building burns down, then you may be covered for relocation expenses while you find a new place to operate.

Business Owners Policy

Also know as a BOP, is a type of policy that is idea for certain small businesses. A BOP insurance policy for IT consultants combines several types of valuable coverage into one policy, including general liability coverage, business interruption coverage, and property coverage, usually at a price that is affordable for the business' budget. An independent agent can help you find the right level of coverage for your business needs and make sure that you are fully protected from financial stress if the unexpected happens.

Workers Compensation

If you have employees and they get hurt on the job, workers comp pays to help them heal. It as also required in most states by law, and to get contracts with larger firms you might do work for.

Cyber Liability Insurance

Any business doing computer work in cyber space should consider data breach insurance. This type of insurance pays for data loss, cyber hacks, breaches of information, and computer viruses, should a client file a claim against you and allege that the system that you provided to them is at fault.

Even if you are not held ultimately responsible for the losses experienced by your customers, you should be able to provide a defense for yourself. This type of IT consultant insurance policy pays for the cost of litigation and other types of expenses if you face a liability in a cyber lawsuit.

Premises liability exposure is minimal since most client contact is done electronically or by mail. Off-premises exposures arise from sales visits, training sessions, and installation of software or hardware at the customer's premises. There should be policies and training regarding acceptable off-premises behavior.

If the consultant works on the client's computer, the client's property could be damaged, either the actual hardware or by corrupting code on the existing software. Personal injury exposures arise from breach of confidentiality as employees dealing with clients have access to their records.

Professional liability and errors and omissions exposures are extensive but vary by the type of software and its intended use. If the customized software is essential to the business's operation or used to provide safety services, the errors and omission exposure will be higher as there may be long-term consequences.

Workers compensation exposure is limited to that of an office, although there may be significant off-site work. As work is done on computers, potential injuries include eyestrain, neck strain, carpal tunnel syndrome, and similar cumulative trauma injuries that can be addressed through ergonomically designed workstations. Back sprains and strains can result from lifting and other material handling if there is any moving of computers or related equipment.

Property exposures consist of an office operation, as well as any incidental storage and areas for service work on computers. Ignition sources include extensive electrical wiring to support computers and servers, heating and air conditioning systems, wear, and overheating of equipment. Fire, smoke, and water can cause significant damage to equipment. Fire protection should consist of chemical applications instead of water.

Although computer equipment can be included as part of the business personal property coverage, more complete protection is available under a computer or EDP policy. A detailed emergency plan should be in place since downtime is not an option. Extra expense coverage is needed more than business income due to contract deadline dates and should be purchased as a part of the EDP policy. The concentration of electronic equipment may be targeted by thieves. Appropriate security controls should be taken including physical barriers to prevent access to the premises after hours and an alarm system that reports directly to a central station or the police department.

Equipment breakdown exposures are typically moderate. Climate control is essential to proper computer function, and breakdown of the air-conditioning units may cause serious loss. There is also significant potential for direct or indirect loss due to computer breakdown or damage by power surges and power failure, affecting hardware, data, and media. Coverage may be addressed under either an EDP or equipment breakdown policy.

Crime exposure is from employee dishonesty and computer fraud. Developers may have access to private financial information of their clients, especially for billing purposes, and represent a target item for identity theft. Hazards increase in the absence of proper background checks and monitoring of the insured's workers who may have such access.

Inland marine exposure includes accounts receivable if the programmer offers credit, computers, and valuable papers and records for customers' information. A computer or EDP policy is critical since it covers hardware, software, and media. There should be frequent backup and off-site data storage. Typically the consultant works at the client's premises, presenting transit and off-premises exposures.

There is a high risk of theft, both of portable hardware such as laptops and handhelds and of the software programs. Extra expense is an important option to purchase because of the need to quickly return to operation after a loss and meet contractual obligations. Information used to document the programming is not software and must be insured as valuable papers or its digital equivalent. All contracts, documentation, software design, copyrights, and patents, on paper, disks or other media, should be duplicated and the duplicates should be kept off site.

Business auto exposure may be limited to hired and non-owned. There will likely be extensive off-premises work by sales representatives, programmers, and technicians. The consultant may have a fleet of private passenger vehicles, require that employees use their own vehicles, or may use rental vehicles. If vehicles are provided to employees, there should be written procedures in place regarding personal use by employees and their family members. All drivers must have appropriate licenses and acceptable MVRs. Vehicles must be maintained and records kept in a central location.

IT consultants may face various risks that could result in lawsuits. Some common reasons why IT consultants may be sued include:

Professional negligence or errors: IT consultants may be sued if their professional advice, recommendations, or services result in financial losses or damages to their clients due to negligence or errors. For example, if an IT consultant fails to implement proper security measures, resulting in a data breach for their client, the client may sue for damages.
Insurance protection: Professional Liability Insurance, also known as Errors and Omissions (E&O) Insurance, is designed to protect IT consultants against claims of professional negligence or errors. It can help cover legal defense costs, settlements, or judgments arising from such claims.

Breach of contract: IT consultants may be sued for breach of contract if they fail to deliver services or meet contractual obligations as agreed upon with their clients. For example, if an IT consultant fails to complete a project within the agreed-upon timeline or budget, the client may sue for breach of contract.
Insurance protection: General Liability Insurance can provide coverage for breach of contract claims in certain situations. For example, if the breach of contract claim arises from a covered incident such as property damage or bodily injury, General Liability Insurance may help cover the legal costs or damages.

Intellectual property infringement: IT consultants may be sued for intellectual property infringement if they use, reproduce, or distribute copyrighted or patented material without proper authorization. For example, if an IT consultant uses software or code without the appropriate licenses or permissions, they may face a lawsuit for copyright infringement.
Insurance protection: Intellectual Property Liability Insurance, also known as Technology E&O Insurance, can provide coverage for claims of intellectual property infringement. It can help cover legal defense costs, settlements, or judgments arising from such claims.

Data breach or cyber liability: IT consultants may be sued if they fail to adequately protect their clients' data or if they are responsible for a data breach or cyber incident that results in financial losses or damages. For example, if an IT consultant fails to implement proper security measures, resulting in a data breach that exposes sensitive client information, they may face a lawsuit for negligence.
Insurance protection: Cyber Liability Insurance can provide coverage for data breach or cyber liability claims. It can help cover costs associated with data breach notification, credit monitoring services, legal defense, settlements, or judgments arising from such claims.

Third-party injury or property damage: IT consultants may be sued for third-party injury or property damage that occurs during the course of their work. For example, if an IT consultant is working on-site at a client's office and accidentally damages the client's property or causes injury to a third-party, they may face a lawsuit for damages.
Insurance protection: General Liability Insurance can provide coverage for third-party injury or property damage claims. It can help cover legal defense costs, settlements, or judgments arising from such claims.

It's important to note that insurance policies can have specific terms, conditions, and exclusions, and coverage may vary depending on the policy and the insurance provider. IT consultants should carefully review their insurance policies and consult with their insurance agent or broker to understand their coverage and ensure they have adequate protection for their specific needs.