What may come with an IT consultants insurance plan

October 12, 2009 · Filed Under IT Consultants Insurance 

Whether your game is software design, network development, or Internet Marketing, you may find that IT consultants insurance provides a valuable safety net. This is because it protects against some of the legal threats which are associated with common business practices.

For being sued is now a very real risk, not just for doctors and other professionals, but for anybody who offers their advice on a professional basis.

Clients may take legal action if they feel that you have done a poor job or have cost them money. They may seek compensation through the courts and lodge cases which can drag on for many months and which typically need legal help to defend.

IT consultants insurance with a professional indemnity element may help to pay your legal costs up to a set ceiling.

To give an example, you may draw up a plan to upgrade the company network of a client. But then later if the client believes it contained erroneous advice, IE mistakes, they may seek legal action to recover any money which they spent putting it right.

One of the major benefits of IT consultants insurance is that it does not matter whether or not the claim against you is true or not, typically a policy may pay out regardless. However, the alleged mistake must take place within the guidelines of policy. Most may payout in the event you are accused of a mistake, error, or negligent act, or general slip up in the conduct of your business.

Beyond this a policy also typically pays out if you or an employee of yours is accused of dishonesty, and is perhaps said to have stolen from a client. Beyond this it may also payout in the event you are accused of unintentional defamation, breach of copyright or confidence, or even slander.

This kind of insurance in most cases pays out regardless of what stage your case reaches. Provided you are within the payout limit, you get cash for representation whether you are in initial proceedings or have ended up at the High Court.

If damages are awarded against you, i.e. compensation, a policy may pay out towards this as well, which again may be covered in full if you are still within the policy limit.

In such circumstances you may save hundreds of thousands of pounds or more which you may otherwise have to dig out of the company coffers, or face bankruptcy in some circumstances.

The policy limit is important because it is often linked to the premium. Too much cover and you may end up over insured, paying for a level of protection which you don’t really need. Too little, and you may also end up under insured, picking up any additional cost past the policy limit if you face a lengthy case.

This is why it is important to consider the maximum payout on a policy. You may want to judge it by taking professional advice and looking carefully at the clients you deal with and your turnover before settling on an IT consultants insurance plan.


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