Getting protected with computer contractors insurance
When setting up a business in the IT sector, there’s usually a check list to be gone through before a business can operate fully. Once premises have been secured, equipment bought and marketing budgeted for, attention tends to turn to the more detailed administration requirements. An insurance policy will be needed to protect the business should it suffer a burglary or fire – few people forget this – but legal risks can also require a form of protection. Making a mistake while working for a client, such as erasing data or failing to install virus software properly, can lead to the company concerned losing money, sometimes referred to as suffering ‘financial injury’. The client may then look to get compensation by making a legal claim. This is why computer contractors insurance which includes professional indemnity cover can be important.
Although some businesses overlook it entirely or put off getting it, indemnity insurance is seen as increasingly important to any firm which provides professional advice to clients. This is because of a higher emphasis on taking legal action in the event of suffering a loss – a more legally aware society naturally leads to more claims, valid or invalid.
An indemnity insurance policy tends to apply when a case is levelled against a consultant following a mistake, omission or act of negligence. It won’t make the problem go away but will cover the legal costs of defending such a case, up to an agreed ceiling. Hiring a defence team can be a highly costly proposition – particularly in more lengthy or detailed cases.
One option of course, would be for the contractor to conduct their own legal defence – unlikely to be successful if they have no legal training. Representing oneself also means being away from the business for long periods, which could lead to the loss of other clients – therefore most people do not take this chance and instead opt for the right type of insurance cover.
Computer contractors insurance with indemnity cover will often have public liability insurance incorporated into the policy. It will also cover legal claims such as being sued having unintentionally defamed someone or breached their confidentiality or copyright. Cover will also normally kick in if a contractor faces a damages claim after losing someone’s important documents or data. Even if an employee steals from a client who then sues, the indemnity cover will then pick up the legal bill.
Premiums will relate to the level of computer contractors insurance cover required and any excesses which are agreed – with some policies being good value without scrimping on the detail. Once the cover is in place a computer contractor then need not unduly worry about a legal case – any related costs should not significantly trouble their business.
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