Business insurance for IT consultants
IT consultants need cover for mistakes in what they deliver and for incidents in clients' systems. Here is how professional indemnity, cyber and basic cover fit together.
An IT consultant basically needs the same cover as other consultants: professional indemnity for clients' financial losses, and business insurance for equipment and liability. The difference is that you often have access to clients' systems, so a cyber incident can both hit your own company and lead to a claim from the client. That makes cyber more important for IT consultants than for most.
What is different for IT consultants?
Most of what is on the page about insurance for consultants applies to you too. But IT work has two quirks:
- Mistakes in a delivery often show up later. A bug, a misconfiguration or a migration that loses data can cause large costs for the client long after the job is finished.
- You hold the keys. Admin rights, passwords and access to production environments mean an incident on your side can become an incident on the client's side.
The first is usually handled by professional indemnity. The second by cyber insurance, and sometimes by both, depending on what happened and on the policy terms.
What most IT consultants need
Professional indemnity
For the client's financial loss if your code, configuration or advice causes it.
Cyber
Help and compensation if your company is breached, and protection if the incident spreads to the client.
Property
Computers and equipment, including when travelling and at clients' sites. Read more about property insurance.
General liability and legal protection
The basic cover in business insurance, for physical damage and disputes. Read more about legal protection insurance.
Example: The migration that lost orders. An IT consultant moves an online shop's database to a new platform. A bug in the script wipes a week of order history, and customers don't receive their deliveries. The shop claims compensation for lost sales and extra work. The professional indemnity insurer investigates the claim and pays the loss if the consultant is liable.
Good to know. If you have access to clients' systems, read what the contract says about security requirements and liability for incidents. Hold those requirements up against what your cyber and liability insurance actually cover.
Frequently asked questions
Is professional indemnity enough, or do I need cyber too?
They cover different things. Professional indemnity applies to mistakes in your work that cost the client money. Cyber applies to breaches and attacks, both against your own company and, depending on the terms, when they hit the client. Many IT consultants need both.
