Thinking about IT contractors insurance

April 3, 2010 · Filed Under IT contractors insurance 

IT contractors insurance typically isn’t mandatory in many contracting situations (though some clients may demand it) – but it may be a very good idea.

Professional risks

As an IT professional, you are probably rightly proud of your skills, knowledge and expertise.

You deploy these in support of your client’s objectives and receive a fee in return.

Unfortunately, things don’t always run quite as smoothly as that.

Things can and sometimes do go wrong and your relationship with your client or associates can sour very quickly.

Whatever may have been the case in the past, today people are inclined to turn quickly towards claims and legal redress when a problem arises. If you don’t have insurance to help protect you from the financial implications of such situations, then you may find yourself digging deep into your personal or company financial reserves.

IT contractors insurance (professional indemnity insurance)

Professional indemnity insurance (often abbreviated to PII or PI insurance) typically incorporates the provision of technology contractors cover. This may help offer some financial protection against certain risks.

The cover offer of course varies depending upon the policy but typically includes things such as:

  • public liability;
  • accidental breaches of confidentiality;
  • loss of a client’s data or documents;
  • slander and libel;
  • defamation of character;
  • your unintentional infringement of intellectual property rights;
  • etc.

It is worth noting that the above forms of professional indemnity insurance typically differentiate between your accidental transgression and an intentionally criminal act – the latter will typically not be covered.


Some IT contractors have progressed their careers for many years and never encountered any problems of the type outlined above. Let’s hope that you have the same good fortune!

The problem is, getting hit by any of these types of problems, even once, could easily lead to your financial ruin. So, do you want to gamble on your good luck holding forever?

The typical costs of PII may be seen as relatively modest in terms of the risks that you are perhaps taking by doing without it.

Finding out more about IT contractors insurance sooner rather than after it’s too late, might be a good investment of a little of your time.


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