IT Consultant Insurance

IT Consultant Insurance

Companies rely on IT professionals for a myriad of technology-related projects that come with many risks. Protect your practice against claims of negligence, errors, or omissions with IT consultant insurance.

Zensurance - IT Consultant

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IT Professional

Insurance for IT consultants

IT consultants are responsible for a wide range of tasks for their clients, including writing, testing, and supporting custom software, and designing integrated hardware, software, and communications infrastructure. But with these responsibilities come considerable risks. For instance, if one of your clients suffers a financial loss due to your work or advice, you could be sued for damages. IT consultant insurance can help protect you from the economic impact of such an event.

IT consultant insurance is a policy that’s customized to address the risks information technology professionals face, such as allegations of negligence, or third-party lawsuits seeking compensation because of a mistake or omission in their work that causes a client to suffer damage or loss.

An IT consultant insurance policy package typically includes the following types of coverages:

  • Errors and Omissions (E&O) Insurance: Also called professional liability insurance, E&O insurance provides cover for client claims alleging financial loss because of your work or advice you provide. It provides you with financial support for your legal defence and damages arising from lawsuits alleging misconduct, negligence, mistakes, omissions, and failing to deliver a service.
  • Cyber Liability Insurance: No IT consultant should provide services without including cyber liability protection in their overall insurance policy. Cyber liability coverage provides you with financial support in the event you suffer a data breach, cyber-attack, or another form of cybercrime involving your computing systems and client data.
  • Commercial General Liability (CGL) Insurance: CGL protects IT consultants from financial losses resulting from third-party bodily injury or property damage claims. If you are liable for someone’s personal injury, property damage, or advertising-related losses because of your operations, you could face an expensive lawsuit. CGL provides you with financial cover for your legal defence and the cost of damages. CGL may also include product liability insurance that causes bodily injury or property damage to another by any product you sell or supply.
  • Commercial Property Insurance: Commercial property insurance, or business contents insurance, protects your business property, its furnishings, electronics, and inventory if damaged by fire, flood, extreme weather, vandalism, or theft.
  • Legal Expense Insurance: The cost to hire and retain legal counsel is not cheap. Legal expense insurance is designed to cover that cost. It provides you with access to legal advice with an experienced lawyer and includes financial support for a broad range of legal challenges, including tax protection, employment disputes, debt recovery, and statutory licensing protection.

Different insurance companies charge different premiums, and they consider several factors when assessing your risk and determining the cost of your policy. However,  IT consultants can anticipate spending approximately $650 annually for a commercial general liability policy with a $2 million limit.

  •  The products and services you provide
  • The types and size of your clientele
  • Your practice’s location
  • Your years of experience
  • Your training, licensing, and professional certifications
  • The number of employees you have if any
  • Annual and projected gross revenue
  • Your insurance claims history

After submitting an application for a free quote, our licensed brokers will shop our partner network of more than 50 Canadian insurers to find you a policy that suits you at the best price available. You can then decide on which coverages to select, the limits, and deductibles. A Zensurance broker can help guide you through that process.

Any independent IT consultant or IT business providing professional services or advice should purchase a custom liability insurance policy. If a client determines your advice or service was less than satisfactory or resulted in a financial loss to them, they may take legal action. IT professionals who require protection include:

  • Computer installation and repair professionals
  • Computer and software programmers
  • Mobile app developers
  • IT help desk professionals
  • IT support specialists
  • IT security professionals
  • Software developers
  • System analysts
  • Web developers

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Common claims scenarios

IT professional liability

Problem: You were hired to implement a database server migration for a client’s network. In the transition process, you forget to back up the older server, which causes significant data loss. The client sues you for negligence and loss of income.

Outcome: Your E&O insurance may pay for your defence costs and the monetary judgment against you in court or an out-of-court settlement

network security liability

Problem: After providing IT security services for a client, a cybercriminal hacks their way into the network and gains access to your client’s database, stealing their confidential information, including names, addresses, and credit card details.

Outcome: Your cyber liability insurance may pay for the cost of repairing and restoring the affected computing systems and software, provide credit monitoring for your client, and your legal expenses.

fractured ankle injury

Problem: A new client visits your office for a consultation but trips and falls while climbing a stairwell, suffering a fractured ankle. They sue you for third-party bodily injury.

Outcome: Your commercial general liability insurance may pay for the injured client’s medical expenses and your legal fees.

Frequently asked questions

How does E&O insurance differ from professional liability insurance?

The difference is only in name. E&O insurance and professional liability insurance provide the same coverage and protection for IT consultants.

Does E&O insurance provide me with coverage for a fraudulent act inflicted on a client that was committed by one of my employees?

No. For protection against fraudulent acts, employee dishonesty, or other criminal activities committed or alleged to have been committed by one of your employees, you need commercial crime insurance added to your policy.

I’m having trouble collecting money a client owes me after completing a project for them months ago. Can my insurance policy help?

Yes. If you have legal expense coverage included in your overall policy, you can seek legal help from an experienced lawyer who can help you resolve the situation quickly or pursue the matter in court. Legal expense coverage will pay for your legal fees to pursue a client for breach of contract or failure to pay the amount you are owed.

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Even the most meticulous, cautious IT consultant can make a mistake or be affected by an accident or event beyond their control. You understand the value of having an adequate backup. Be sure to back yourself up with a customized IT consultant insurance policy.

Fill out our online application to get a free quote. Let our licensed brokers find you the policy you need to ensure your business is protected from all risks.