Insurance for IT Professionals - What insurance do I need?
So you like to build networks, code websites, manage IT systems, program software, project manage or sell hardware? You might be the “IT crew” with the task of getting it done for the businesses you contract to and making sure their IT systems are flying. Or you may be contracted in to do the grunt work of coding, reviewing, deploying and testing. Do you ever wonder “what happens if one of my staff busts the system? Will I be liable to pay for a whole new network?”, or “What if I deploy some code that damages the company’s operations?”.
If you’ve ever wondered, “do I need to be insured for this?”, like contractors of all types, the answer is yes. IT professionals and IT services businesses definitely need insurance, like any other business.
So what types of insurance do IT professionals need?
Following are some of the types of insurance that IT professionals like you might need. Be sure to check with an insurance broker with experience in covering IT professionals as each IT services business is different and will require a unique approach.
Professional Indemnity insurance is used by IT Professionals like you as cover for negligent acts, errors or omissions in the performance of your professional service. An example of this might be damage caused by error in the code you write and deploy, or documents lost due to a security issue that you are responsible for. Professional Indemnity insurance may pay compensation to the third party and help with your defence costs.
Public and Product Liability
Public and Product Liability protection, sometimes called Broadform Liability insurance, for you and your IT business is activated in the event that you cause harm to a customer, supplier or member of the public or their property. This might be when you are on site at a customer’s premises and you are involved in an injury to a customer. Perhaps you inadvertently damage a customer’s hardware while you are building their network. A public and product liability policy can be used to cover the costs associated with loss or damage of goods, compensation for the injury caused or legal costs in defence or settlement of a claim among other costs.
Business insurance is critical to cover your general business risks such as an office that you keep, stock that you hold, or equipment that you use.
Workers Compensation Insurance
If you employ any staff then Workers Compensation Insurance is a legal requirement.
As an IT professional you are at risk of a malicious cyber incident. This may be against your company, or against the company to which you are supplying your IT services. The incident may be caused by a cyber criminal or even a rogue employee. Cyber insurance is used to cover you and your business for these types of risks. You may become victim to ransomware or viruses, possibly passing on these viruses to your clients, or even their clients. This can quickly become a costly event, with virus extraction or repair of networks required, and even repair of your customer’s reputation, through public relations support. In addition if you keep a copy of any information that belongs to a customer, or if you have critical information of your own, you may need cover for any complications arising from a data breach.
If your business has to temporarily cease trade due to an interruption in your critical infrastructure you may be able to claim against your general or cyber-based business interruption coverage. Cyber-based business interruption insurance, often included in Cyber Insurance policies, may even provide cover in the case that a third party supplier, such as a cloud-based service provider, goes down.
Do I need to insure my IT Services business?
As an IT professional, you are intimately involved in the operations of your customers, whether you maintain their networks or are deploying code to their site. So ensuring that you are adequately insured is critical in protecting your business from the risks that IT professionals face, as you seek to contribute to the businesses of others.
Advisr does not provide advice and does not hold a financial service license (AFSL). All information above has been provided by Andrew Terzakis.