A Deeper Look At General Liability Insurance For IT Contractors
Dan Levenson September 06, 2016
It is not an uncommon scenario: An independent IT contractor is working to secure a contract for work from a company, and that contract requires proof of insurance. The contractor, however, has let their policy lapse from the last time they needed to provide proof of coverage.
Now he or she must scramble to obtain coverage in order to retain that company’s business.
Not a fun situation, is it?
While it often depends on the type of IT work you do, the tech industry is a wide area that sometimes involves frequent visits to other locations. You may initially think going into the field to work on someone’s computer won’t cause any issues.
You would be wrong.
Don’t become complacent—there are more risks than one would expect. When services are performed for outside clients, many things could go wrong where your company gets the blame. This can not only endanger your reputation, but your company’s finances as well.
Let’s look at what you might need as an independent contractor sending IT technicians into the field. (Remember, you may need to get separate liability policies for specific situations.)
The Two Types of Protection In General Liability Insurance
When you’re shopping around for general liability insurance, you want to make sure it covers two areas: bodily injury and property damage.
Both of these might sound unimportant, but a technician traveling to a remote location already brings a risk of bodily injury. If they’re in an accident on the road or at the client’s location, bodily injury protection helps cover medical expenses. Also, you typically get legal coverage as well if they decide to sue you for negligence.
Other bodily injuries could occur on the job, especially if told to do a task you didn’t realize had extreme risks. Some IT technicians have to work with cables or do specific wiring for equipment. This could involve coming in contact with precarious areas which could lead to electrocution.
Property damage may occur separately or at the same time as the above mishap. Even working on a computer could cause damage to property if the technician makes a major mistake during their work.
General liability policies protect you if your workers happen to cause damage to property belonging to others.
Completed Project Liability
Sometimes tech-related jobs can cause damage after the technicians leave the client’s home or business. Consider getting a completed project (or product) liability policy.
Working on a computer could potentially cause damage later if the technicians failed to address security protocol or didn’t provide full protection from cyber threats. Similarly, if a fire results due to faulty wiring, it may not happen until the technician leaves.
The same thing could happen if your technicians provide products to outside clients. One of your products could cause damage or malfunction, causing a serious situation for a client.
This policy protects from the legal costs you’d have to pay in a lawsuit, possibly due to injuries.
Personal Injury To Reputation
You could face slander or libel charges due to harming a client’s reputation. Such a situation could occur if the work your technician did for the client caused them to lose business. For instance, if your technician failed to address a cyber threat, it could create embarrassing and money-losing issues for the client.
A client might even accuse you of false advertising claims. As a result, having this separate policy protects you financially while dealing with protracted litigation.
Contract disputes are always possible when doing consultant work as a technician. General liability policies don’t always cover this, so it’s a good idea to ask for a similar policy through your insurance company.
Having to deal with disputes over contracts could involve lengthy legal proceedings due to complex wording in contracts. It’s always important to have as much legal protection as possible.