Just one lawsuit could destroy your business, that is why, as the owner of a technology consulting agency or SMB, it is vital that you protect your company from unexpected liabilities. The first step in doing so is to choose an appropriate commercial insurance policy
that aligns with your firm size and focus.
Common business risks
that you should consider when purchasing an insurance policy include:
- privacy violations
- and data breaches,
- property damage,
- human capital costs,
- professional service mistakes,
- international transit/export issues.
Any one of these could result in a costly lawsuit that may bankrupt your business. If your current insurance policy does not protect you under these circumstances, it may be time to re-evaluate your coverage. For business owners, this can feel like a daunting task.
As an expert in technology insurance, the team at Alexant is well-versed in your unique needs and can help you decide on the type of coverage that will best-serve your business. So, we put together the following guide on the top insurance policies that technology consulting businesses need.
General Liability Insurance: What it is and Why You Need it
General liability insurance protects your business
from some of the most common incidents that lead to legal action, such as third-party bodily injuries, third-party property damage, harm to reputation, and product liability. For example, if a client trips and falls at your office and breaks a wrist, your general liability policy will help cover their medical bills.
This type of insurance coverage sometimes offers additional benefits
that you may not be aware of, such as adequate coverage of the “unexpected,” and even the ability to close deals or contracts more easily.
When firms are deciding between bids to determine which technology consulting firm they want to work with, an existing general liability policy could move your bid to the top of the list. This is because most businesses require the companies they work with to have insurance coverage before bidding on or closing a deal. So, if your policy is already in place, you’ll have an edge over the competition.
Professional Liability Insurance: What it is and Why You Need it
Professional Liability Insurance
will protect your company in the event of work mistakes, undelivered services, or negligent services. Like all insurance policies, this type of coverage could save your business money by covering unforeseen expenses such as legal fees and damages. Therefore, all small professional service agencies or SMBs should have this type of insurance.
Errors and Omissions or E&O Insurance is another term that is sometimes used to describe professional liability insurance, and is generally required for professional service or advice-giving companies, such as those who offer technology consulting. Like Professional Liability, this kind of policy will save a small business a significant amount of money in the event of a lawsuit by covering court costs and settlements up to the amount of the policy.
It is essential to look at the specific coverage offered by a Professional Liability Insurance policy, versus one that covers Errors and Omissions. In general, Professional Liability Insurance will offer more comprehensive coverage
, but it is important to consider your business’s unique needs when selecting a policy.
Workers Compensation Insurance: What it is and Why You Need it
Workers Compensation Insurance protects employees
who experience a work-related injury or illness. Benefits include medical coverage, replacement income, compensation for permanent injuries or disability, death benefits, and vocational rehabilitation. Most states require businesses with employees to purchase a workers compensation policy, so this is something to consider and to factor into your budget before placing any help wanted ads to expand your technology consulting firm.
Coverage under this type of policy is granted regardless of fault, however, there are exclusions. If an employee is injured because of something the employer did or failed to do, he or she may be awarded double the workers compensation benefits. Your insurance policy will not cover the extra benefits awarded if there is “serious or willful misconduct committed by you,” you knowingly employ someone in violation of the law, “you fail to comply with a health or safety law or regulation,” or “you discharge, coerce or otherwise discriminate against any employee in violation of the workers compensation law.”
Often times, anemployer’s liability insurance
is considered the “part2” of workers compensation. Your workers compensation policy will cover medical bills and lost wages, as discussed above. However, if the employee believes that your negligence caused the incident, he or she has the right to file a lawsuit for additional damages. In these cases, an employer’s liability insurance policy would cover legal expenses such as attorney fees, court costs, and settlements or judgements. If your business does not possess the funds to self-insure, you should consider this coverage.
Data Breach Insurance: What it is and Why You Need it
Millions of people have had their personal information leaked due to data breaches in 2019 alone; and the companies targeted by these breaches have endured hefty fines and legal fees, as well as damage to their reputation. Unfortunately, cyber-crimes are a reality of our connected world, but fortunately for you, there are ways to reduce the risk they create for your business.
So, if your technology consulting company is entrusted with any level of sensitive customer data, such as names, addresses, health information, and social security numbers, data security should be of the utmost importance to your firm and data breach or cyber liability insurance
is a necessity. Securing this type of policy will protect your company’s assets in the event of hacking, data breaches, or other cyberattacks. Benefits generally include personal identification restoration for affected customers, recovery of compromised data, assistance in notifying customers of a breach, repairs for damaged computer systems, and legal support.
Nowadays, it is common for general liability policies to include a provision for electronic data liability, which would offer your business protection in the event of a data hacking incident. However, it is important to double-check that the policy you are considering does indeed include coverage in these situations. And, if it does not, obtain a separate policy that covers data breaches.
Get Started with a Trusted Insurtech Consultant Company
With so many options out there, selecting the right commercial insurance policy for your technology consulting SMB or agency’s size, focus, and financial position can feel extremely overwhelming. But with over five decades of seasoned expertise in the insurance industry, as well as over 25 years of experience in financial management, training and support, the team at Alexant is here to ease your mind. Our insurance consulting services can help you to identify and adopt the policy that will protect your assets when something unexpected occurs, so that you can continue to focus on running and growing your business. Learn more about Our Consulting Services