Information technology, or IT, is a term that is used to cover any job that is involved in storing or processing data using computers and software. The jobs that are involved in IT are as varied as it comes, but they all have one thing in common, mistakes can be costly and devastating to a business.
The first digital computer was made in the early 1940′s. It was a giant machine that took up an entire room. With limited applications and very few people who understood how it worked, the computer was a novelty. What has happened in the last 70 years is somewhat astounding. Computers have gone from giant behemoths with one operator to small, fast efficient machines that are on every desk and in every home. Most people know how to operate a computer and many make a living out of it. Companies have grown increasingly dependent on computers and some have even gone paperless.
The Internet commercialized in 1995 and we haven’t looked back. Information is available at the touch of a button and businness leaders are able to communicate remotely with their workforce. This advance has allowed large companies and small businesses alike to set up websites, process orders or requests for information online, connect their workforce worldwide and allow employees to access their work desktop from home, among many other things.
Information technology, as a profession has taken off in step with these substantial improvements to the business economy. Where companies used to have one computer professional, they now have extensive IT departments and many contract out work for projects or data management. Independent IT professionals can do quite well working for themselves.
Of course wherever there’s work being performed, inevitably there are mistakes and the resulting damage will oftentimes lead to a lawsuit: because of this, IT professionals should carry IT contractor insurance. It may seem like something as intangible as information technology does not require insurance, however, there are many things that can happen which could bankrupt an IT professional without insurance.
Things that may be included in an IT contractor insurance policy are: Legal defence, damage caused by either w2 or 1099 subcontractors, copyright or intellectual property infringement, breach of contract, software malfunction, data loss, or virus. Beware of policies with super cheap premiums as they most likely will cut coverages. Ask the insurance broker what is covered in the policy and what is excluded. Find more than one broker and get multiple bids as well as multiple opinions as to what coverage is optimal for the business considering the work being done, number of employees and scope of the projects.
Being under insured leaves a business vulnerable to out of pocket expenses if a judgement is levied against them that is over the policy limit or if damage is caused by something excluded in the policy. The flip side of this however is that over insurance is paying a higher premium for something that can never be recouped. If you insure a server for 500k, and it’s only worth 350k, when it is destroyed the insurance company will only pay you 350k. The other 150k will never be paid out, but the premium is based on this amount.
So, carry IT contractor insurance, make sure the policy is right for your business, shop around, find an agent you can trust, and know your policy inside and out.
