Insurance for IT Professionals

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.

A Business Owner’s Policy (BOP) provides general liability coverage for third-party claims of bodily injury and property damage, along with coverage for your own business property.

If your IT business has computers and other equipment and tools, a business owner’s policy can cover claims of theft or damage and get you back to work fast. If you own the building where you do business, a BOP can cover that as well.

Here’s an example. An IT consultant rents an office in an office building. An office on the floor above catches fire. The consultant’s office isn’t impacted by the fire itself, but the water used to put out the fire leaks into the consultant's office and damages several servers. The consultant’s BOP could cover the cost to replace the consultant’s equipment.

A BOP includes general liability coverage, so a separate general liability policy is not required.

IT professionals are well aware of the prevalence of cyber incidents, and the impact they can have on a small business. Cyber security insurance is important for IT professionals as it covers the costs associated with a data breach, cyber crime, business interruption due to a malware attack, and more.

A Hiscox Cyber security insurance policy also includes tools to prevent an attack in the first place, and expert breach response services for immediate assistance if an incident occurs.

Here’s an example of how cyber security insurance can protect an IT business. An IT consultant received a message from a threat actor that their computer was infected with malware, and the consultant could not access their system. The threat actor demanded a ransom of $1 million in Bitcoin.

The IT consultant immediately called the Hiscox breach response team, who advised them not to pay the ransom. The team then provided the consultant with specific instructions on how to protect themselves from further damage, how to restore their data, and how to notify any customers whose data may have been compromised.

Within 48 hours, the consultant was back up and running, and their Hiscox policy even covered the income they lost while their system was down.