IT contractors insurance is a type of business insurance designed to protect IT professionals from the common risks of the industry, from professional errors and data breaches to property damage. Even the most diligent of professionals can still find themselves up against unforeseen accidents, errors and disputes, which is why the appropriate business insurance can help.
Create a tailored policy that combines different types of cover to suit your business needs, including IT contractors professional indemnity insurance and public liability insurance.
What type of IT contractor insurance do you need?
As an IT contractor, there are numerous types of cover to protect you from different kinds of risks. The type of insurance that you will need depends on factors such as the nature of your work, where you work from and whether you have any employees. The most common type of cover for IT contractors to have is professional indemnity insurance, which covers claims of negligence, unintentional breaches of data and poor advice.
While most forms of business insurance are not a legal requirement in the UK, some clients will ask for a certain level of cover as a term of contract. It can also help to determine if you are working outside of IR35 (learn more about IR35 in our guide), as contractors must be seen to be legitimately working on a self-employed basis and having business insurance is one indicator of self-employment.
Professional indemnity insurance for IT contractors
By offering your personal services or professional advice to other businesses, you become vulnerable to claims brought against you by clients if something were to go wrong. Professional indemnity insurance for IT contractors can cover claims of substandard work, breach of contract, faulty advice that leads to a financial loss, infringement of intellectual information and professional errors. While it isn’t a legal requirement in the UK, it will often be included as a term of contract to have a certain level of professional indemnity cover.
If, for example, a client alleges you installed buggy software or you carried out work that breached the security of their systems, they may choose to take legal action. Professional indemnity insurance can cover the cost of compensation claims, legal advice and action and other costs associated with rectifying the issue.
IT contractor public liability insurance
If your job involves any interaction with members of the public, whether they be clients, customers or passers-by, public liability insurance can cover you for any claims made against you for bodily injury or property damage caused by your work. As an IT contractor, this could be something like a passer-by tripping over your laptop cable and injuring themselves, or you spilling a drink over a client’s computer and causing it damage.
Public liability insurance covers compensation payments, and the cost of legal advice and action.
Employers’ liability insurance for IT contractors
As a contractor, it’s likely that you work by yourself, however if you do employ one or more members of staff you are legally obliged to have employers’ liability insurance. This type of insurance covers you if a claim is made against you by an employee for bodily injury or illness caused by the work they do for you. Costs that it can cover include compensation payments, legal advice and action and medical bills.
In the IT industry, examples of employers’ liability claims could be stress caused by pressure to meet deadlines or back problems from spending long hours at a computer.
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Cyber and data risk insurance for IT contractors
Cyber and data risk insurance is designed to protect you financially if you fall victim to a cyber-attack. It can cover costs such as ransom demands, restoration of IT equipment, recovery of data, reputation management and loss of income.
If you store sensitive data on your computer system or other external devices, you may want to consider having this type of cover to safeguard your business.
Office contents insurance for IT contractors
Whether your focus is software or hardware, as a tech consultant there’s equipment you depend on to support your clients. Equipment breakdown or damage could lead to your business activities being disrupted, this business interruption can be costly.
Office contents insurance can protect business equipment, such as computers, furniture and documents, while portable equipment insurance can cover gadgets and tools that are used away from the workplace.
What is your profession?
Find out more about the range of insurance covers we offer to specific industries and professions in the list below: