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Why do IT consultants need insurance?
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 provide coverage for the most common IT consulting risks.
Technology errors and omissions insurance
Technology E&O, also called professional liability insurance, is crucial for IT consulting and other professional services. It covers lawsuits related to work performance.
BEST FOR
- Failure to deliver promised services
- Claims of negligence
- Work errors and oversights
Cyber insurance
A cyber liability insurance policy helps technology consulting businesses survive data breaches and cyberattacks by helping to pay for recovery expenses and associated defense costs.
BEST FOR
- Data breach legal costs
- Client notification expenses
- Fraud monitoring costs
General liability insurance
This policy covers risks every IT consultant faces, such as accidental damage to a client's laptop. Bundle it with 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 fund 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 in an accident involving a company vehicle. Most states require it for business-owned vehicles.
BEST FOR
- Car accidents
- Vehicle theft and vandalism
- Weather damage
Looking for different coverage? See more policies.
How much does insurance cost for an IT consultant?
An IT consultant who works independently will pay less for insurance than a larger consulting firm.
Factors that affect premiums include:
- IT services offered
- Business property and equipment
- Types of insurance purchased
- Coverage limits and deductibles
- Claims history
How E&O insurance protects your business
View video transcript.
No, no, no! My client's network was working just fine last week!
You made a mistake, yeah, you made a mistake. You made a mistake, and it doesn't matter what you say. You missed the boat, now you will have to pay!
Actually, you have errors and omissions insurance. It covers legal costs if you make a mistake and your client sues you.
Mistake! Mistake! Ohhh, this was a mistake! Mistake! Mistake! Ohhh, this was a mistake!
You can get all the coverage your business needs by following this link. Protection is peace of mind!
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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Common questions about IT consultant insurance
Review answers to frequently asked questions (FAQs) about IT and computer consultant insurance and more.
Why is business insurance necessary for IT consultants?
While IT consultants have a deep knowledge of the tech industry and various computer systems, even a small, seemingly harmless lawsuit can have a serious impact on your IT business.
If a client says you failed to prevent a data breach or missed a deadline, it could have a financial impact on your business even if you’re not at fault.
From professional liability for IT consultants to workers' compensation, there are several software consultant insurance policies that should be considered as part of a risk management plan, including:
- Technology errors and omissions insurance, sometimes called tech E&O or tech professional liability insurance, can help you with legal fees and court costs if a dissatisfied client sues you over your work performance.
- Cyber insurance, also called cybersecurity or cyber liability insurance, insures against the high cost of a data breach or a malicious software attack, as well as the cost of customer notification, credit monitoring, legal fees, and fines.
- Commercial property insurance covers your business' property and equipment in case it's damaged, lost, or stolen. It's often bundled with general liability insurance in a business owner's policy (BOP) to save money.
- Workers' compensation insurance is required in most states for businesses with employees. Workers' comp covers medical expenses and lost wages due to work-related injuries and illnesses. This is important since private health insurance won't cover medical bills related to your job.
- Commercial auto insurance is also required by most states for anyone with a business-owned vehicle. This policy covers legal bills, medical costs, and property damage in case of a vehicle accident. If you or your employees operate personal, rented, or leased cars for work, then you'll need hired and non-owned auto (HNOA) insurance.
Are IT consultants required to have insurance?
While many policies are not required by law, IT consultants can safeguard their reputation and bottom line, as well as qualify for contracts and leases by carrying the right insurance coverage. For some businesses, workers' comp and commercial auto coverage may be required.
In most instances, IT consultants and new business owners will apply for general liability insurance first. This policy covers common business risks such as customer injuries, damage to a customer’s property, and advertising injuries.
Even small software consultant businesses are vulnerable to the same lawsuits as larger IT businesses, which is another reason why you’ll also need policies like tech E&O or cyber insurance.
In order to accept certain contracts, the client may require you to have a fidelity bond, which reimburses the client if one of your employees commits fraud, theft, or forgery.
Do IT consultants need professional indemnity insurance?
IT consultants aren't required by law to carry professional indemnity insurance, however, it's a smart move when building a risk management plan for your business.
Professional indemnity insurance, also called professional liability insurance or errors and omissions (E&O) insurance, protects you in the event a client files a lawsuit against your IT consultancy for an error, mistakes, or professional negligence.
Specifically for IT consultants and other technology businesses, you can bundle E&O coverage with cyber insurance into a tech E&O / technology professional liability policy. This would be cheaper then purchasing the policies individually.
How can I save money on IT consultant insurance?
There are many steps you can take to get affordable insurance coverage.
Start by comparing free business insurance quotes from leading insurance companies through Insureon’s online application. If you're unsure what policies you need, our licensed insurance agents can help make sure you get the right, most affordable coverage for your small tech company.
Most small businesses can get insured and download a certificate of insurance within hours of applying for quotes.