Why IT Consultants Need Professional Liability Insurance
IT consultants are typically independent contractors, and likely have to set up their own insurance coverage, including health insurance and possibly other policies. Along with these, your IT consultant clients must evaluate their need for Professional Liability Insurance. This will protect them if they have a client who files a lawsuit regarding how they did or did not fulfill their professional obligations.
One example of when a consultant would need professional liability insurance is if they design a customer database for the client, and a glitch after implementation prevents anyone from accessing that data for a period of time. This could cause significant financial loss for their clients, resulting in a lawsuit to cover the costs of their losses and more. Professional liability insurance with coverage of that amount plus the consultant’s legal fees would protect them in the event of a judgment.
The two most basic realities that your IT consultant clients need to be aware of are:
- They are at higher risk in the tech business. This is because technologies are so new, and the law is still being defined and shaped.
- Dissatisfied or dishonest clients could bring claims. The standard IT claim is brought when their clients perceive that they’ve lost money because of something the IT consultant did or something they should have done but didn’t.
It’s important for your clients to remember that their risk is not based on the likelihood of them losing a lawsuit, but rather that of one of their clients bringing one against them. Even if the case is completely baseless, your client can go bankrupt defending themselves against the claim without the appropriate insurance coverage.
PLRisk Advisors is a leading wholesale insurance brokerage covering the professional liability market. Our team of seasoned professionals has the depth of knowledge to help our agency partners secure the best quality of coverage for their clients. We provide Professional Liability insurance for IT consultants. For more information, contact us at (855) 403-5982.