Insurance for IT consultants

Professional liability insurance—also called errors and omissions or E&O Insurance—provides numerous benefits to IT professionals, including coverage for personal injury (libel and slander), negligence and claims against past-rendered services, including defense costs. Although events such as fraudulent acts, property damage and bodily injury aren't covered by technology professional liability insurance, this type of insurance is very important for anyone who regularly provides professional services or advises clients.

Consider this scenario. A website designer finished a coding a new site design for an ecommerce company. The day the new site was launched, a bug in the code 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 your website design firm against claims of negligence and will appoint an attorney to defend you, if needed, even if you haven’t made a mistake.

When a client reacts negatively to your work, accuses you of breaching a confidentiality agreement or otherwise feels as if they or their business has been damaged in some way by the services you provide as an IT professional, you could be sued. Potential problems for professionals can come in many different forms, but you can protect yourself by getting professional liability insurance for IT consultants.
 

In addition to times when IT professionals can benefit from holding professional liability insurance, there are some scenarios that are not typically covered under this type of policy. General Liability—also called commercial general liability (CGL)—covers technical consultants against property damage, claims of bodily injury and any associated medical costs.

Here’s how general liability could protect a programmer’s business. 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.

Though your property won't usually be covered under general liability insurance, damage sustained to third-party property typically will be.
 

For some professionals, a business owners policy (BOP) may make sense. BOP is a combination of general liability and business property insurance and is often used to provide coverage to small businesses with the aim of protecting valuable equipment.

A business owners policy could protect a computer programmer who, for example, spilled his coffee on his high end computer system causing irreparable damage. The business owner’s policy could cover the cost to replace the system, letting the programmer get back to work.