Why take out IT consultants insurance?

August 11, 2010 · Filed Under IT Consultants Insurance 

IT consultants insurance may also known as professional indemnity insurance (PI insurance). This is a form of protection that with most professions you do not have to take out by law, but it may be wise to do so (and some professions will require that you have it in order to practise).

A policy typically gives you insurance against a number of events that may lead to your clients taking you to court. Court costs soon add up, so the insurance is potentially a type of safety net against financial ruin.

Sticking by the rules
Even if you stick to all the rules something may happen that you have no control over. You may lose your client’s data and even though it was an accident, your client may wish to take you to court, especially if this loss of data had some serious ramifications to their business.

The same may happen if you are accused of slander or defamation of character. IT consultants insurance may generally cover accidental situations such as these.

Things to remember when considering insurance
There are some things to remember when you are considering taking out IT consultants insurance. The first of these is that the insurance may not help you if you do something intentionally and you are found guilty in court. In this case you will typically be liable to pay the costs yourself.

Also bear in mind that all insurance policies typically come with terms and conditions, along with exclusions. The exclusions are usually what you cannot claim on your insurance policy for. The limitations generally state how much you may be able to claim, in the event of making a successful claim for one of the events covered in the insurance policy.

If you fail to take out IT consultants insurance and the worst were to happen could you afford to bear the potentially large costs that may be involved? You may even end up losing a great deal more than your credibility; you might lose your business to pay for your mistake.

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