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IT consultant insurance that protects your business
A claim that your advice caused a financial loss could devastate a small technology consulting company. IT consulting insurance covers legal fees from dissatisfied clients. It can also cover injuries, theft, and other risks.
Find the right coverage
Insureon helps you find IT consultant insurance coverage that matches your unique risks.
Get free expert advice and peace of mind knowing you have the right property and liability coverage for your consulting firm.
Which business insurance policies does an IT consultant need?
These policies cover the most common IT consulting risks.
Technology errors and omissions insurance
Tech E&O bundles E&O insurance, also called professional liability coverage, with cyber insurance. It covers legal defense costs related to claims of negligence.
BEST FOR
- Work errors and oversights
- Late or undelivered professional services
- Data breach lawsuits
Cyber insurance
A cyber liability insurance policy helps IT consultants recover financially from data breaches and cyberattacks. It's recommended for any business that stores personal information.
BEST FOR
- Data breach investigations
- Client notification expenses
- Fraud monitoring services
General liability insurance
This policy covers risks every IT consultant faces, such as dropping a client's laptop. Bundle it with commercial property insurance for savings in a business owner’s policy (BOP).
BEST FOR
- Client bodily injuries
- Damaged client property
- Slander and other personal injuries
Fidelity bonds
This bond, also called an employee dishonesty bond, compensates clients if an employee at your consulting firm steals from them. It's often required for client contracts.
BEST FOR
- Employee theft or fraud
- Unlawful data access by an employee
- Illegal funds transfer by an employee
Workers’ compensation insurance
Small business owners buy this policy to meet state insurance requirements for employees. It also protects sole proprietors from work injury costs that health insurance might deny.
BEST FOR
- Employee medical expenses
- Disability benefits
- Employee injury lawsuits
Commercial auto insurance
Commercial auto insurance can pay for property damage and medical bills from an accident involving a company vehicle. Most states require it for business-owned vehicles.
BEST FOR
- Injuries caused by a company car
- Property damaged by a company car
- Vehicle theft and vandalism
Looking for different coverage? See more policies.
How much does insurance cost for IT consulting businesses?
IT consultants who buy policies through Insureon pay an average of $30 per month for general liability and $65 per month for E&O insurance.
A consultant who work independently can expect lower insurance prices than a bigger business.
Factors that affect IT consultant insurance premiums include:
- Professional services you offer
- Business property and equipment
- Annual revenue
- Types of insurance purchased
- Coverage limits and deductibles
- Any endorsements, such as intellectual property (IP) insurance or business interruption insurance
- Claims history
Protect your IT consulting business with the right insurance
View video transcript.
[video: an animated header displays the Insureon logo. Underneath it, a subheading displays the text: "What insurance do IT consultants need?"]
MALE VOICEOVER: If you're an IT consultant, one mistake, outage, or cyber incident could cost you thousands. But, with the right insurance, you can safeguard your business and your reputation.
Whether you're a freelance IT consultant or run a small firm, you’ve got enough on your plate. Let’s break down the essential insurance coverage IT consultants need, without the jargon.
The top policy IT consultants should carry is errors and omissions insurance, sometimes called professional liability coverage.
If a client claims your advice, code, or system setup caused financial loss, E&O insurance will help cover your legal fees, settlements, or judgments.
Even small mistakes can turn into big claims.
[video: an illustrated header displays the text: "E&O / Professional liability covers:"]
[video: Under above header, three bullet points display the text: "Accusations of negligence"; "Work errors that cost clients' money"; "Missed deadlines"]
As an IT consultant, you often handle sensitive data or managing systems. If there’s a data breach, ransomware attack, or security failure, a cyber insurance policy can help cover response costs, client notification, and recovery.
It’s especially important if you store client data or access their networks
[video: an illustrated header displays the text: "Cyber insurance covers:"]
[video: Under above header, three bullet points display the text: "Data breach response costs"; "Investigations and recovery expenses"; "PR efforts to repair reputational harm"]
You may also need general liability insurance.
This covers third-party injuries or property damage, like if you accidentally damage a client’s equipment on-site.
Many consultants bundle this with property coverage in a business owner’s policy, or BOP, for extra savings.
However, if you are self-employed or don't commute to an office, you can instead add a business personal property endorsement to your general liability policy. This coverage helps protect any computers or other equipment that you use for your business while working from home.
[video: an illustrated header displays the text: "General liability covers:"]
[video: Under above header, three bullet points display the text: "Slip-and-fall accidents"; "Client property damage"; "Advertising lawsuits"]
Depending on your setup, you might also need workers’ compensation insurance if you have employees... commercial auto insurance if your firm owns vehicles... and tools and equipment coverage if you regularly transport your tech equipment to jobsites or clients.
[video: an illustrated header displays the text: "Other coverage IT consultants may need:"]
[video: Under above header, three bullet points display the text: "Workers’ compensation"; "Commercial auto"; "Tools and equipment"]
Some clients even require proof of insurance before signing a contract, especially for errors and omissions coverage, or cyber insurance.
Tech professionals often have the ability to add third-party cyber liability coverage with their errors and omissions insurance policy. This bundle is referred to as technology errors and omissions insurance, or tech E&O.
Having the right policies in place can help you win more business and build trust.
[video: an illustrated header displays the text: "Tech E&O bundles:"]
[video: Under above header, two bullet points display the text: "Errors and omissions coverage"; "Third-party cyber coverage"]
With Insureon, you can compare quotes from top-rated carriers, choose the coverage you need, and get insured, often in just minutes.
That way, you can focus on growing your IT consulting business, and not worry about what could go wrong.
Get free quotes for your business with Insureon today. Tap the link to get started.
[video: an illustrated header displays the text: "Insureon is the #1 digital agency for small business insurance."]
[video: an animated header displays the Insureon logo]
How do I get IT consultant insurance?
It's easy for IT consultants and cybersecurity consultants to get business insurance if you have your company information on hand. Our insurance application will ask for basic facts about your business, such as revenue and number of employees. You can buy a policy online and get a certificate of insurance with Insureon in three easy steps:
- Complete a free online application
- Compare insurance quotes and choose policies
- Pay for your policy and download a certificate
Insureon's licensed insurance agents work with top-rated U.S. providers to find coverage that fits your IT consulting firm, whether you work independently or hire employees.
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FAQs about IT consultant insurance
Review answers to frequently asked questions about IT and computer consultant insurance and more.
Why is business insurance necessary for IT consultants?
IT consultants need insurance to protect against unexpected costs that could devastate their small business.
When you start out as an IT consultant or other IT services business, you likely won't have a lot of resources to spend on an injury or a lawsuit. That means a simple accident or lawsuit could have a serious impact.
One of the most important policies for your profession is technology errors and omissions insurance (tech E&O), which bundles cyber insurance and errors and omissions insurance at a discount. Also called tech professional liability insurance, this policy helps pay legal fees if a dissatisfied client sues you over your work performance.
While E&O insurance covers lawsuits related to professional negligence, cyber insurance extends that coverage to include data breach lawsuits—both are crucial for IT consultants.
Specifically, the third-party cyber insurance included in tech E&O covers claims that you failed to prevent a data breach at a client's company. For instance, a data breach might happen because you recommended insecure software to a client, or failed to install important security updates on their systems.
Keep in mind, you'll still need general liability insurance. While cyber insurance covers third-party data breaches, a general liability policy covers common third-party accidents, such as a slip-and-fall injury or an employee who drops a client's laptop.
If I work from home, do I need IT consulting insurance coverage?
IT consultants who work from home face many of the same risks as bigger businesses. So, you likely need business insurance for the same reasons:
- To sign contracts. Your clients might require you to carry coverage in order to mitigate the risks of working with your small business.
- For financial protection. A work injury or client lawsuit could derail your business financially, if you're uninsured.
- To get a loan. Lenders often require insurance as a prerequisite for a business loan, since they want your company to stay solvent.
Though you might have personal auto insurance or health insurance, keep in mind these won't cover business-related incidents. You'll want to consider hired and non-owned auto insurance (HNOA) if you drive your own car for business use, and workers' comp for protection against work-related medical bills.
Are IT consultants required to have insurance?
In some cases, business insurance is required by law. Clients, landlords, and lenders might also require you to carry coverage.
Here are several situations where IT consultants must have insurance:
- You have employees. Most states require workers' comp for businesses that have employees.
- You have a company car. Similarly, you'll need commercial auto insurance to comply with state laws if your business owns a vehicle.
- You rent an office or apply for a loan. You might need general liability insurance to sign a lease or get a business loan. This coverage shows others your business is protected from legal costs, which reduces their risks as well.
- Your clients require coverage. Clients may include liability insurance as part of a contract requirement to prove that your business can withstand a lawsuit. They might also ask you to have a fidelity bond, which reimburses them if one of your employees commits theft or fraud.
Even when it's not required, it's important to have insurance. Without it, medical bills and legal costs from a single accident or error could potentially bankrupt your business. You can consult an insurance agent for advice about common exposures, or how to fill any coverage gaps.
Do IT consultants need professional liability insurance?
IT consultants aren't required by law to carry professional liability insurance. However, it's a smart move when building a risk management plan for your business.
Also referred to as professional indemnity insurance, this policy protects you in the event a client files a lawsuit against your IT consultancy for an error, oversight, or other negligent act. More often in the IT sector, this coverage is called errors and omissions insurance.
Specifically for IT consultants and other technology businesses, you can bundle E&O coverage with cyber insurance in a tech E&O policy. This would be cheaper than purchasing the policies individually.
How can I save money on IT consultant insurance?
It's easy to get affordable insurance coverage with Insureon. Our easy online application lets you compare quotes from trusted providers to find policies that fit your budget and your business risks.
Other ways to save money on coverage include:
- Bundle policies. You can often save money when you buy multiple policies from the same provider. The most common example is a business owner's policy, which includes general liability insurance and commercial property insurance.
- Customize your coverage. It's possible to reduce your premium by choosing lower limits or a higher deductible, but make sure it's enough to cover a potential claim.
- Manage your risks. Claims increase your premiums, which is another reason to try and reduce accidents and injuries. You can avoid employee injuries and prevent customer lawsuits by reducing clutter, dim lighting, and other workplace hazards.