Working as an IT consultant means you’ll be exposed to a range of risks – and it’s likely you’ll want to be protected in the event that these risks threaten your financial position.
That’s where business insurance comes in, with different forms of cover able to provide assistance if you’re the subject of certain claims. Here’s a quick breakdown of the requirements and the protection that could be particularly important for IT professionals – as well as the scenarios in which it might prove useful:
Professional indemnity insurance is a regulatory requirement for IT consultants as you deal with sensitive customer data. It provides cover in the event that a customer claims your work has led them to experience damage or financial loss.
Public liability insurance is highly recommended if you deal with the public during the course of your work. It can offer protection in the event customers or members of the public claim they have suffered injury or property damage as a result of your activities – or those of your business.
For instance, if a customer slips on a wet floor in your office and you haven’t displayed appropriate warnings to alert people to the risk, you could be liable for any injury they suffer.
If you have an office set up for running your business, it’s likely you’d have considered insuring it against the possibility of damage to the structure or contents.
Buildings insurance provides protection in the event of damage to the main structure of the building, and cover may also include permanent fixtures and fittings.
Contents insurance provides protection for the physical items belonging to your business, and is able to cover costs that can result from damage or theft.
Employers’ liability insurance is a legal requirement if you have employees assisting in your day-to-day operations. As an employer, you are liable for their safety at work and may be held accountable for any illness or injury they suffer while carrying out their duties. Employers’ liability cover could bear the costs you incur in the event that your employees make such claims against you.
If you own an IT consulting firm with executive and management level employees, D&O insurance cover can be useful. This provides protection for claims made against high level employees in your company such as directors, managers, executives or officers. High level employees are individually liable for their actions and can be sued directly if they’re accused of wrongdoing – be it failing to fulfil their duties or making decisions that have an adverse effect on others. At such times, you may find it difficult to afford legal costs and compensation, so D&O insurance could prove invaluable in such instances.
Entity defence provides protection for your business in the event of an action brought against the company rather than an individual. This cover is often sold as an extension to a D&O policy.
Entity defence covers the legal costs and expenses you may incur in defending claims that can result from scenarios such as identity fraud, breach of contract or regulatory issues. * Identity fraud: instances where someone has fraudulently entered into an agreement with a third party by representing themselves as your company. * Breach of contract: instances of claims which allege a breach of contract for goods or services provided. * Regulatory: instances of claims related to health and safety.
This insurance covers lost revenue you may suffer due to disruption to your business or an unexpected closure, usually as a result of an accident or disaster that affects your ability to carry out your business’s daily operations.
For example, a fire in your office could damage your business items and have a negative financial impact if you are not insured. Business interruption insurance could cover your overheads and compensate you for the revenue you lose during the time it takes for your business to resume normal operations.
This form of insurance protects your business against cyber-related dangers such as damage caused by viruses or hackers resulting in loss of your customer’s confidential data. As an IT consultant, your work is centered on electronic information and any damage may prove costly. E-risks insurance can also provide cover in case of damage to your business caused by improper handling of electronic data.