Outlining IT contractors insurance

June 4, 2010 · Filed Under IT contractors insurance 

As an IT contractor, it may be advisable to consider the benefits of IT contractors insurance cover.


No matter how good you are at your job, if you think back over your career in IT, you may well be able to remember occasions when projects you were working on went wrong. Perhaps serious consequences arose for your employer.

If you were a permanent employee, you may have been protected from all of the financial consequences.

That may not be the case if you’re working as an external contractor.

Professional indemnity cover

IT contractors insurance is a form of professional indemnity insurance (PII).

It is not usually a mandatory requirement for IT contractors in the same way as it typically is for solicitors, architects, insurance brokers and the like.

It provides financial protection against claims by your client that your mistake, negligence or bad professional advice, have resulted in loss or damage to them or to their business.

They may know you didn’t mean any harm

In today’s harsh economic reality though, the chances that an unintentional error of judgment on your part will be overlooked with a shrug of the shoulders may be very slight indeed. Budgets are typically tight and there may be no slack available to rectify the position.

It may be all too tempting for a client to decide to sue you to try and get some redress for your actions.

Wide range of cover

PII can provide cover for a lot more than just faulty system design, missing deadlines or bad programming. It can also protect you financially if you are sued as a result of action such as:

  • you losing your clients data or documents;
  • defamation, libel or slander;
  • a dishonest act on you part;
  • you accidentally breaching clients confidentiality;
  • infringement of intellectual property rights.

You may find that your legal fees, which may need to be paid even if no case is found against you, will typically be included as standard in the PPI policies of many providers.

All other things being equal

Competition for IT contract positions can be fierce.

Even though it is optional for your line of work, having IT contractors insurance in place may highlight your professionalism and maturity to potential employers and could help swing a hiring decision your way and help you secure that precious contract.


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