Why consider computer contractor PII?
Going it alone as a self-employed IT professional or founding an entire company is no mean task. It involves courage, planning, and having a sound business mind. Laying the right organisational framework can often secure the future of the business, even though administrative tasks can seem tedious. Putting business insurance in place is therefore arguably as necessary as getting hold of the right equipment. One of the typical types of cover taken out by freelance IT professionals and firms is computer contractor PII, or, to give it its full title, professional indemnity insurance.
Although indemnity insurance might be more associated by some people with doctors, engineers, or other professions, the increasingly legally-aware nature of today’s business world means it is now at least considered by almost every type of company which offers advice to clients. Indemnity insurance is designed to guard against some of the legal risks that could see an individual or business facing a very large legal bill following a claim by a client or other party. It typically applies to any claim made following a mistake, omission or act of negligence. Although the contractor themselves may not be at fault at all, and a client may lodge a complaint just because they are unhappy, such accusations will still not be cheap to defend in court - meaning even a company which is facing an invalid claim will often still have to pick up a bill.
Computer contractor PII will pay the associated legal costs of defending a case. For example a contractor might make a mistake in installing a network firewall for a company which means the client then loses valuable data and sues. The contractor then finds they must hire a defence solicitor which costs them £30,000 during the course of the case. An indemnity policy will pick up this bill entirely, provided it falls within the agreed limits of the policy.
In this sense PII is not much different to more usual insurance policies. It can be set to cover certain limits - say £50,000 of legal bills, £100,000 or £1 million, for example. An excess will also normally be agreed between the policyholder and the insurer - which is an initial amount which must be paid before the cover kicks in. So an excess of £1,000 means the first £1,000 of a £30,000 legal bill will be paid by the policy holder with the insurance company picking up the remaining £29,000.
Computer contractor PII can also be extremely useful in that it will often cover more than cases which result from straightforward mistakes. It will typically also cover accusations that a contractor has breached someone’s copyright during the conduct of their business or that they have committed a breach of confidentiality. The possible dishonesty of any employees of a contractor will also normally be covered. It is thanks to this relative flexibility and detail that a policy will therefore help form an effective legal blanket for almost any IT-related business.
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