5 Ways IT Consultants Can Save Money On Insurance
Dan Levenson March 21, 2017
As an IT consultant, it’s hard to predict the myriad things that could go wrong in your line of work. Whether it’s a mistake on an employee’s part or a client who is simply unhappy or unwilling to pay for contracted work, without insurance, you could be sued for hundreds of thousands of dollars, maybe even $1 million or more—even if you’ve done nothing wrong.
Naturally, you’ll want to get the most cost-effective insurance coverage possible while making sure that there aren’t any gaps that could put your business in jeopardy.
Here are just a few ways IT consultants like you can save money on business insurance.
1. Bundle your insurance
You can save money by purchasing a Business Owner’s Policy (BOP). This will allow you to have both general liability insurance, which can pay for property damage and injuries to third parties, and property insurance, which will provide money to repair or replace your equipment and office equipment.
Both policies are necessary for your financial protection, so doesn’t it make sense to save money by bundling them together?
2. Raise your deductible to lower your premium
When you do this, although the money you pay out-of-pocket if you have a claim will be more, your premium will be lower. This may seem logical, but consider what your higher financial responsibility might be in case of litigation. Regardless, liability claims likely don’t happen that often in your profession.
3. Upgrade the security in your building
This might be one money-saving feature you may not think of. Some improvements could include installing shatter-resistant windows, security cameras, and an alarm system.
This could save money by deterring theft, which could greatly reduce your property insurance claims. Before doing this, however, tell your insurance agent what your plans are first. He or she can tell you if the improvements qualify you for a discount.
4. Make sure you only purchase insurance you need
In most cases, a few policies are a necessity:
- Errors and omissions insurance, which can protect you if someone sues you, claiming you didn’t provide professional services or that you made a costly error.
- General liability insurance, which will protect you if someone falls and is injured in your office, you or an employee damages important documents or computer, or you are sued for slander. This protects you for a business or another person’s claim of damage to property, personal injuries, or medical costs.
- Cyber liability insurance, which would pay if someone sued you and won because of a data breach.
- Property Insurance, which will protect not only the physical space of your business (if you own property) but your inventory, equipment, and other assets vital to your work.
5. Be certain your employees are properly classified
You may already know you need worker’s compensation for your employees. Having them properly classified, however, can save you money.
Your insurer needs to use the proper classification codes for all your employees. Using incorrect codes can cause you to pay too much or too little for the coverage.
Why You Need Insurance
It can cost you a lot of money to not be insured or have inadequate coverage. Could you afford to write a check to a client for $500,000 or even $1 million if a database you designed doesn’t work for three days and you get sued for lost revenue? Could you pay tens of thousands of dollars if sued for damages or if a virus is introduced into a client’s computer system?
Your legal fees could be huge if you are sued, even if you did nothing wrong. A client may sue you because he doesn’t like the quality of your work, simply because he wrongly believes something you provided didn’t function properly, or you didn’t deliver something you promised—even if the whole issue is just a matter of miscommunication.
By keeping the above tips in mind, you can ensure that your company has the proper coverage without breaking the bank. And it never hurts to consult an insurance agent who can help you assess your risks and find the best coverage for your unique needs.