Protecting your livelihood with IT consultants insurance

June 12, 2010 · Filed Under IT Consultants Insurance 

You may find yourself being sued. Without IT consultants insurance, you may end up needing to pay possibly crippling amounts of money to settle damages and legal fees.

How could that happen?

As an IT consultant, you may be responsible for giving advice and guidance on some significant spending decisions.

While the budget holders may all sign off on your recommendations, if there are problems later on, you may find that you’re held accountable.

Indemnity insurance

IT consultants insurance is a type of professional indemnity insurance (PII).

This provides financial assistance in the event that the client you are working for suffers damage or financial loss which can be attributed to something that you may have done, or omitted to do, in the course of providing them with your services.

As an IT consultant, negligence on your part may be more likely to cause financial rather than physical damage.

Some typical areas where PII for IT consultants may typically help provide you with protection include:

  • accidental breach of confidentiality;
  • loss of documents or data;
  • infringement of intellectual property rights;
  • defamation of character;
  • allegations of libel or slander.

PII will typically also cover your legal fees and expenses, whether or not the case against you is upheld.

Optional extra

Indemnity insurance for IT consultants is not compulsory in the way it typically is for some other professionals like solicitors or financial advisors.

However, aside from the very real protection that PII provides, it may also demonstrate your responsibility and professionalism to potential clients.

In an environment where competition for work is fierce, having a few extra points in your favour may do no harm.

Continuity of cover

An interesting facet that may be worth consideration is that with many providers of PII, if you stop paying premiums your cover will stop. Nothing unusual in that, you may think.

The trouble is, the nature of your job is such that it may be that problems do not arise straight away.

So if you finish one assignment, decide to take some time off and cancel your IT consultants insurance because you won’t actually be working, you may have to make special arrangements (sometimes known as run-off cover) to ensure that you would still be covered for historical problems.


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