Computer consultants, IT consultants and systems designers plan and design computer systems that integrate hardware, software and other communication technologies. They may design these components or recommend and purchase components developed by third parties on behalf of their clients. Computer and IT consultants also often install the systems they design well as educate, train and support a system’s users.
These are common examples of work performed by computer or IT consultants:
- Computer systems integration design consulting
- Local area network systems integration and design
- Information management systems integration and design
- Office automation systems integration and design
Like any business, computer consultants and IT consultants face numerous business risks. They need business insurance to help mitigate those risks and protect their businesses from harm.
Computer consultants and IT companies face a variety of significant risks, including the following:
- Mistakes, oversights, errors or negligence that leads to costly network downtime for clients
- Communication breakdowns and misunderstandings with clients
- Property damage caused by you or your employees
- Workplace accidents and injuries
- Theft or vandalism
- Weather events, fires and other property damage
IT Consultant Insurance
Computer consultant insurance protects you from risks that you are exposed to in your day-to-day business operations.
Commercial general liability (CGL) insurance for IT consultants offers broad protection from third-party bodily injury and property damage claims. If an employee damages a customer’s computers while working at the client’s office, the client could make a claim for damages and your CGL policy would pay. Likewise, if a client, vendor or delivery person slips or fall at your office, your CGL policy pays for any medical expenses or related costs if a claim is filed against your business.
You could be sued in both of these cases, and for many other reasons. Even if the suit is unfounded, you have to defend yourself. Attorney fees, court costs, and court-ordered settlements or judgments can be devastating to any business owner. A computer consultant general liability policy protects you in these circumstances and pays for costs related to such lawsuits up to the limits of your policy.
A computer consultant general liability policy also protects you from claims related to copyright infringement, advertising liability, slander and libel.
Whether you own your building, lease your office space or have a home office, you need some type of protection for your business property. Commercial property insurance covers damage to a building and its contents (computers, office equipment and furniture, supplies, fixtures, etc.) damaged by a weather event, fire, theft, vandalism and other causes of loss. Most business property policies also offer coverage for business interruption to you pay for ongoing expenses if you must temporarily close or relocate due to a covered property loss (e.g., a fire).
Certain small businesses are eligible for a business owners policy, or BOP. A BOP is a packaged policy that combines general liability, property and business interruption coverage at an affordable price. Your independent insurance agent can help you determine if you can save money on your IT consultant insurance by purchasing a business owners policy.
Do You Need Cyber Liability Insurance?
Cyber liability insurance is available for any business that wants to protect against costs associated with data losses, computer viruses, and cyber hacks or breaches. As an IT consultant, you can be named in a lawsuit if a client’s system is hacked or attacked by a virus; the client can claim that the system you designed is to blame.
Whether or not you are ultimately held liable for your customer’s losses, you need to be able to defend yourself. Cyber liability insurance protects you in these instances. It may pay for litigation costs and other costs related to a cyber liability lawsuit.
Computer Consultant Errors and Omissions Insurance
Your customers expect a certain level of expertise from you, and they can sue you for damages in case of nondelivery or negligence on your part. Consider the following errors or mistakes and the potential harm to a client:
- You design a network that does not work as promised or has serious deficiencies.
- You perform a faulty backup that leads to a loss of your client’s data.
- You design a network that is hacked or is attacked by a virus.
- You fail to complete a project as promised, on time and within budget.
Professional liability insurance, or errors and omissions (E&O) coverage, protects computer consultants when they make a professional mistake that financially harms a customer. Because errors and omissions insurance covers claims that are not covered by your general liability policy, it is essential protection for your IT consultant business. Even if a negligence claim against you is unfounded, you still have to defend yourself if you are sued.
Without IT consultant professional liability insurance, your personal assets could be at risk. But a professional liability policy will pay for your legal defense, including attorney fees, court costs, and any settlements or judgments that you must pay.
Other IT Consultant Insurance
In addition to the policies described above, you likely need to consider other IT consultant insurance policies.
- Workers’ compensation insurance is required for most businesses that have employees. It protects your employees from the cost of work-related illnesses and injuries by paying for medical expenses and lost wages.
- Inland marine insurance protects computers, equipment and tools that you transport off-site for use at a client’s location. Once your business property leaves your office, it is not covered by your business property policy. Inland marine insurance covers that equipment if it is stolen or damaged while it is in transit or is in storage in another location.
Find IT Consultant Insurance Tailored to Your Business
Whether you are a sole proprietor or a large IT consulting business, you need tailored IT insurance policies. With the advice and counsel of a Trusted Choice® agent, you can compare quotes from highly rated insurances companies. Your agent can work with multiple companies who specialize in insuring technology companies in order to find the best combination of coverage for your needs and budget. Even if you need coverage from multiple insurance companies, you can still work with one agent who can serve all of your needs. Contact your local agent today.