Insurance for IT consultants

Professional liability insurance, sometimes called errors and omissions insurance (E&O insurance), is insurance coverage for claims against businesses that provide professional and personal services – for businesses like yours. When is it important to have professional liability insurance? Examples include:

• Copyright infringement: A software developer is hired to develop a new desktop software. Once the software goes live, the client is approached by a competitor who claims that the software infringes on their intellectual property. The developer is sued for software copyright infringement. Professional liability insurance can protect software developers against claims of negligence and software copyright infringement, even if they haven’t made a mistake.
• Loss of business income: A website designer finished a new site design for an ecommerce company. The day the new site was launched, a bug in the design caused the site to crash. The site was down for three days while the problem was diagnosed and corrected. The client sued the designer for the income lost during that time. Professional liability insurance could protect website designers against claims of negligence and will appoint an attorney to defend them, if needed, even if they haven’t made a mistake.

Learn more about professional liability insurance.

General liability insurance, sometimes called Commercial General Liability (CGL), could protect your business from another person or business’s claims of bodily injury, associated medical costs, and damage to property. Having this kind of coverage is beneficial in several instances:

• Bodily injury: A computer programmer works from home one winter day so that he can accept a business delivery. The delivery man slips in the programmer’s icy driveway, injures his back and demands the programmer pays the hospital bills. General liability insurance can protect computer programmers against third-party claims of bodily injury, associated medical costs and property damage.
• Damage to client property: A software developer meets a client at a local coffee shop to review the updated software. The developer accidentally spills a full coffee on the client’s laptop and damages the hardware. General liability insurance could protect software developers against third-party claims of property damage, bodily injury and associated medical costs.
• Personal injury: A computer programmer went to a bar after work with some friends. After a few drinks, he began talking loudly about an executive at a client company. The comments were overheard by associates of the executive, so word got back to the executive, who sued the consulting company for slander. General liability insurance can protect computer programmers against third-party claims of defamation and slander, property damage, and associated medical costs.

Learn more about general liability insurance costs. 

Business owners Policy (BOP) is a combination of general liability and business property insurance. BOP is often used to provide balanced coverage for small businesses who also want to protect their own business equipment. Some examples of what could be covered are below:

• A computer programmer spills his coffee on a high end computer system causing irreparable damage. A business owner’s policy could cover the cost to replace the system, letting the programmer get back to work.
• A web designer’s home office is damaged by fire. The damage to a high end computer caused the fire is not covered by their homeowner’s insurance, but it is covered by their business owner’s policy, which replaces the computer and lets the designer get back to business.

Learn more about business owners policy.