No matter if you are working with clients directly or through staffing firms, systems integrators and custom programmers will almost always have to have insurance. Perhaps you’re responsible for employees. Or maybe you work independently. You might be wondering if all this coverage is necessary.
It is obvious that you need insurance if your goal is to secure a client. The good news? In most cases, the insurance your client needs can be afforded and will reduce your business’ liability.
Clients often want software developers, system integrators, and programmers to have insurance that includes one or more of the following types of coverage:
General liability insurance
General liability insurance covers injury or damage to property. Client companies will often ask vendors to prove that they have general liability insurance. This includes plumbers and IT contractors. The client’s risk management team may be notified of the need to show proof of general liability insurance in order to minimize the company’s exposure to potential lawsuits and financial losses.
You know that systems integrators are at risk of accidentally damaging hardware, or putting your foot through a drop ceiling while pulling cables. Make sure you have property coverage in your general liability policy if you are worried about your client’s equipment being damaged while you install, configure, or move it. This coverage is not for your business property, but it covers your client’s property that is “in your custody, control, or care.” You can rest assured that you are covered in the event of an accident with a liability insurance package for systems integrators.
Even if you’re a programmer, software engineer, or software developer, there is still the possibility that equipment belonging to clients could be lost or damaged. A package of general liability insurance includes protection for your property, software developers, engineers, programmers and more. This gives you peace of mind that you are covered in the event that you drop the client’s server, spill coffee on a laptop, or any other mishap.
Insurance for professional liability
Professional liability insurance is similar in concept to software developers, programmers and system integrators. It covers errors and omissions that you make while on the job. Because clients know that people make errors, they require it.
The greatest risk to your client when they hire you is the possibility of financial loss or a lawsuit. Your client may want to ensure that you are compensated if you make an error that causes data loss. For example, suppose your client spends hundreds upon thousands of dollars to recover those data files.
It makes perfect sense to have professional liability insurance for programmers and software engineers. If your client alleges that you made mistakes or omitted to pay legal defense costs, you are 100% liable. A misunderstanding can be all that’s needed to bring you into court. Your legal costs can mount once a client claims negligence or communications are broken down.
Workers’ compensation insurance
If you have employees, workers’ compensation insurance must be purchased in almost every state. You can choose to opt out of workers’ comp coverage if you are a sole proprietorship. Your client might require that you have this coverage, even though your state doesn’t offer it. This is because in some states, workers’ compensation policies must be purchased by your client if you are injured on the job. Your client’s insurer may also bill you to cover any subcontractors that do not have their own certificate of coverage. Your client will pay higher premiums in these cases.
You’re likely used to lifting heavy machinery and climbing ladders as a systems integrationist. You may be at risk of developing carpal tunnel syndrome if you are a software developer, programmer or software engineer. Systems integrators can also get workers’ compensation insurance that covers their medical expenses, disability, and compensation for any on-the job injuries.
Workers’ compensation insurance is a good idea if you have employees. You may not need workers’ compensation insurance if you’re a sole practitioner who has your own health and disabled insurance.
Fidelity bond coverage
This insurance is also known as employee dishonesty coverage. It covers your client in the event that you or your employees steal money, or property. Clients in the financial and banking industries will often ask programmers, software engineers, system integrators, and software developers to have fidelity bond insurance. This is because they are entrusting them sensitive information such as account numbers and Social Security numbers.
Many self-employed I.T. professionals are aware of this fact. Professionals are well aware that client information is safe with their employees. However, employees and subcontractors who handle valuable customer or property information can be held responsible. One laptop might go missing, while another programmer in a financial network could steal passwords and account numbers of customers to withdraw money. Fidelity bond insurance covers your client’s loss of property or money.