Experience shows that problems resulting from failures in Information Technology may be all too common. As an IT contractor, while you obviously may take great pride in the quality of your work, if you don’t have IT contractors’ insurance then dismissing these issues as someone else’s problem may be a bit short sighted.
IT contractors’ insurance is a form of Professional Indemnity Insurance (PII).
PII exists to protect professional working people in many business areas from being sued for damages by their clients.
Why it’s important
There are possibly some businesses still around which don’t use information systems of some sort. However, these may be few and far between.
Many companies have a substantial financial investment in the IT infrastructure that may not just support their business but actually be an integral part of the business process itself.
Being able to deliver to customers and clients is crucial to the success of any business and a failure to achieve that can be a financial disaster. If the company’s IT doesn’t function correctly then one of the first things that may suffer is that ability to deliver to the customer.
Of course if this scenario comes to pass, then understandably the company directors may be looking round for someone to blame and possibly to recoup some of their losses.
If they think that the responsibility for their problems rests squarely on your shoulders then you may find yourself on the wrong end of a damages claim alleging that your error or negligence was the cause.
Even if their assertion is subsequently proved to be unfounded, you may still be facing the prospect of having to pay for the legal fess you incurred defending yourself.
This is where IT professionals’ insurance cover could be invaluable.
Level of cover
It’s important to get this right.
The amounts that may be awarded against you can, in some cases, be staggeringly high. The small savings on premium costs achieved by selecting a less than appropriate PI insurance policy may in some cases pale into insignificance when viewed against any shortfall between an award and the amount that IT PII cover could pay out.
Unlike PII for some other professions, IT contractors’ insurance is not compulsory in many situations. It may, however, help protect you in what is becoming a more and more litigious business environment.