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Why do IT project managers need business insurance?
IT project managers are responsible for the success of a project, and can take the blame when something goes wrong. Business insurance covers costs related to breach of contract, IP disputes, data breaches, and injuries. You'll likely need coverage to sign contracts with clients and comply with state laws.
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With Insureon, IT project managers can get insurance quotes from top-rated U.S. providers. One easy online application is all it takes.
A licensed insurance agent is on hand to answer questions and make sure your coverage meets your needs.
What types of insurance do IT project managers need?
These insurance policies cover common risks of IT project management.
Technology errors and omissions insurance
Tech E&O, sometimes called tech professional liability insurance, covers legal defense costs if a project manager is accused of negligence. It's often required to sign contracts with clients.
BEST FOR
- Failed initiatives
- Deviation from project plans
- Missed deadlines
Cyber insurance
This policy helps IT project managers survive data breaches and cyberattacks by helping to pay for recovery expenses. It's recommended for any business that handles sensitive data.
BEST FOR
- Customer notification expenses
- Fraud monitoring services
- Data breach investigations
General liability insurance
A general liability policy covers basic third-party risks, such as client injuries. Bundle it with commercial property insurance for savings in a business owner’s policy (BOP).
BEST FOR
- Third-party bodily injuries
- Third-party property damage
- Libel and other advertising injuries
Fidelity bonds
Fidelity bonds compensate project management businesses and their clients for employee theft and fraud. They are sometimes required by client contracts.
BEST FOR
- Unlawful data access by an employee
- Unauthorized money transfers
- Other employee theft or fraud
Workers’ compensation insurance
Most states require workers' comp for IT project management businesses that have employees. It also protects sole proprietors from work injury costs that health insurance might deny.
BEST FOR
- Employee medical expenses
- Disability benefits
- Legal costs from employee injuries
Commercial auto insurance
This policy covers the cost of accidents involving a company car that belongs to a project management business. Most states require it for business-owned vehicles.
BEST FOR
- Injuries caused by your vehicle
- Accidental property damage
- Vehicle theft and vandalism
Looking for different coverage? See more policies.
How much does IT project manager business insurance cost?
A project manager who works independently won't have to pay a lot for insurance.
Average IT project manager insurance costs include:
- E&O insurance: $65 per month
- General liability: $30 per month
Underwriters will consider the following when determining your premiums:
- IT services you offer
- Business property and equipment
- Business revenue
- Years of experience in your field
- Whether training is done on site or virtually
- Policy limits and deductibles
- Claims history
How do I get project manager insurance?
It's easy to get IT project manager 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 a policy.
- Pay for your policy and download a certificate.
Insureon's licensed agents work with top-rated U.S. insurance companies to find coverage that fits your business, whether you work as an independent professional project manager (PMP) or as part of a corporate project team.
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FAQs about insurance for IT project management businesses
Review answers to frequently asked questions (FAQs) about IT project manager insurance coverage.
Why is business insurance important for IT project managers?
Even if you’re highly skilled at managing budgets, timelines, and technology teams, IT projects come with real risks.
A missed deadline, scope change, budget overrun, or dispute over code ownership can quickly escalate into a costly lawsuit. And in today’s environment—where cyber threats are increasing and stakeholders demand accountability—insurance plays a key role in protecting your business and strengthening client trust.
Here are the top reasons IT project managers need insurance:
- Sign contracts. Many clients require proof of insurance before hiring a project manager to ensure you can take responsibility for mistakes, delays, or financial losses.
- Protect against disputes and lawsuits. Technology errors and omissions (tech E&O) insurance can cover legal fees, settlements, and court costs if a client claims you mismanaged a project or failed to deliver on time.
- Recover from cyber incidents. Cyber insurance helps cover the cost of data breaches, ransomware attacks, and malware incidents—including customer notification, credit monitoring, and legal expenses.
- Get a lease or a loan. You may need general liability insurance to sign a commercial lease or get a business loan, as landlords and lenders want protection against third-party accidents.
- Protect your team. Workers’ compensation insurance covers employee injuries on the job, while commercial auto insurance covers accidents that involve business-owned vehicles.
For IT project managers, insurance isn’t just a safety net—it’s a smart business decision that helps you operate confidently, meet client expectations, and stay protected from the unexpected.
Do independent IT project managers need insurance?
Yes, independent IT project managers have almost the same insurance needs as bigger businesses, as they face many of the same risks. Even if it's not required, it provides crucial financial protection in the event of an accident or professional negligence lawsuit.
Many clients require independent contractors to show proof of coverage before signing a contract or allowing access to their systems. Carrying your own policies signals professionalism, builds trust, and shows you can take responsibility for the work you deliver.
At a minimum, you'll need general liability insurance to cover accidental bodily injuries and property damage, along with tech E&O to protect against lawsuits from dissatisfied clients. Tech E&O helps pay for legal defense costs related to project delays, scope issues, oversights, and professional mistakes—risks contractors face just as much as larger firms.
Cyber insurance is also recommended, as it helps pay for data breaches and often includes measures to prevent cyber incidents from occurring in the first place. Choosing the right coverage helps you qualify for more opportunities, operate with confidence, and shield your business from costly disputes and accidents.
Does IT project manager insurance cover disputes over project scope, change orders, or other contract terms?
Yes, E&O insurance can help pay for lawsuits that arise from contract disputes. Some policies may exclude breach of contract, including for service level agreements (SLAs), so make sure to consult an insurance agent to get the coverage you need.
With the right policy, your business can get protection for:
- Project scope creep
- Change orders
- Project delays
- Software ownership disputes
- Other contract issues
To avoid an E&O lawsuit, it's important to communicate clearly with your clients to make sure they understand project goals and timelines. If an issue arises, attempt to resolve it right away and make sure to document every relevant interaction.
Does my project manager insurance cover work done by subcontractors or third-party vendors?
Your insurance policies don't automatically cover subcontractors and third-party vendors that you bring onto a project.
To get coverage for others, you'd need to add them to your policy as an additional insured. Or, they could add you to their policy if they already have insurance.
You can get additional insured endorsements for general liability insurance, tech E&O, and several other types of coverage. A lawsuit could target any party involved with a project, which is why it's important to make sure that everyone is insured.
Keep in mind, well-written contracts with vendors and contractors can help you avoid claims, such as an IP dispute over ownership of code or materials they created.
How can I save money on IT project manager insurance?
Shopping around is one of the best ways to save money on insurance. With Insureon, IT project managers can get free quotes from top-rated insurance providers in one place by completing our easy online application.
Other ways to find affordable coverage include:
- Bundle your policies. Most small business owners can combine general liability and commercial property insurance in a business owner’s policy (BOP). This option is usually cheaper than buying the policies separately.
- Customize your coverage. Choose higher deductibles, lower limits, and remove nonessential coverages to help control your insurance costs.
- Focus on risk management. Strong IT security practices and risk management strategies can reduce your exposure to claims, which will help keep your premiums low.
- Maintain a clean claims history. Claims can hike up your premium. Keep your record clean by following project management best practices, communicating clearly with clients, and resolving disputes before they can turn into a lawsuit.
What other types of insurance do IT project managers typically need?
Project managers should consider these additional insurance products to avoid costly incidents:
- Intellectual property (IP) insurance: This policy helps pay for legal costs if a project manager gets into a dispute regarding ownership of custom software or training materials.
- Commercial property insurance: Included in a BOP, this coverage provides financial protection for your building and its contents in the event of a fire, storm, or burglary.
- Business interruption insurance: You can add this insurance to a BOP or property policy to protect against financial losses from a temporary forced closure due to a fire or other covered property claim, or extra expense coverage to pay for temporary relocation or other extraordinary expenses.
- Employment practices liability insurance (EPLI): This type of insurance pays for legal costs related to a violation of employee rights, such as unfair hiring practices or wrongful discipline.
- Hired and non-owned auto (HNOA) insurance: HNOA covers work-related driving in a personal, leased, or rented vehicle. It's important since a personal auto policy won't cover business use.
Our expert agents can help you navigate the insurance industry to find specialized coverages that match your business's unique needs.