If you’re a systems integrator or custom programmer, you’ll almost certainly have at least one client who requires you to carry insurance, whether you work directly with them or through a hiring business. Maybe you’re in charge of a team of people, or maybe you’re a freelancer. In either case, you may be wondering if all of that coverage is truly essential.
The basic line is that if you want to land a potential client who demands insurance, you best have it. The good news is that the insurance coverage your customer requires can nearly always be both affordable and beneficial to your company’s liability.
Clients typically want software developers, system integrators, and programmers to be covered for one or more of the following four types of risks:
Insurance for general liability
Property damage and bodily harm are covered by general liability insurance. Every vendor, from plumbers to IT contractors, is frequently required by clients to present confirmation of general liability insurance. The requirement may originate from the client’s risk management, who wish to minimize the company’s possible exposure and financial loss as a result of lawsuits.
If you’re a systems integrator, you’re well aware that there’s always the possibility that you or one of your employees will inadvertently damage the hardware or put a foot through a drop ceiling while pulling cable. If you’re worried about your client’s equipment being damaged while you’re installing, configuring, or just moving it, ensure sure your general liability policy covers property coverage. This is coverage for your business property, but it also extends to client property “in your care, custody, or control.” A liability insurance package with property coverage for systems integrators provides you peace of mind knowing you’re covered if something goes wrong.
Even if you work from home or in an office as a software developer, software engineer, or programmer, there’s a chance that client equipment in your custody will be harmed. General liability insurance that includes property coverage, as well as coverage for software developers, engineers, and programmers, gives you peace of mind that you’re covered if you drop a client’s server or spill coffee on a laptop.
Liability insurance for professionals
For software developers, programmers, and system integrators, professional liability insurance is equivalent to malpractice insurance. It protects you against mistakes and omissions on the job. Clients demand it because they understand that humans make mistakes.
Your client’s biggest concern when hiring you is that your errors may result in a lawsuit or financial loss. For example, if you make a mistake that causes data loss and your customer has to spend hundreds of thousands of dollars to recover the data files, your client will want to know that you will be able to compensate the firm.
Professional liability insurance is a no-brainer for software developers and programmers. If your client alleges you made errors or omissions, you’re 100% accountable for any legal defense costs if you don’t have it. In many circumstances, all it takes is a misunderstanding to result in a lawsuit. When a client accuses you of negligence and communication breaks down, your legal costs might quickly escalate.
Insurance for workers’ compensation
If you have employees, you must obtain workers’ compensation insurance in almost every state. Most states allow one-person businesses to opt-out of workers’ compensation coverage. However, even if your state does not require it, your client may insist on it. The reason for this is that in some places if you’re hurt on the job, your employer is required to cover you under its own workers’ compensation policy. Additionally, your client’s insurance carrier may charge the client to cover all subcontractors who do not present their certificate of insurance. In both cases, your client will pay a greater premium.
You’re probably used to carrying heavy equipment and scaling ladders as a systems integrator, and you’re aware that there’s always the risk of harm. If you’re thinking about getting insurance as a programmer, software developer, or software engineer, keep in mind that you could be at risk for carpal tunnel syndrome. Workers’ compensation insurance covers medical bills, as well as disability and compensation, for systems integrators, programmers, software developers, and engineers who are injured on the job.
Workers’ compensation insurance makes sense if you have employees. It may be unnecessary if you’re a single practitioner with your health and disability insurance, but you may need it to get employment.
Coverage for fidelity bonds
This sort of insurance, often known as employee dishonesty coverage, compensates your client if you or one of your employees steals money or property while on the job. Because they’re entrusting software engineers, software developers, system integrators, and programmers with sensitive information like customer Social Security and account numbers, clients in the banking and financial services industries are more likely to ask them to carry fidelity bond insurance.
Client information is protected by the majority of self-employed IT specialists. However, no matter how much you trust your employees or subcontractors with important property or client information, anything can happen, and if it happens, you could be held accountable. A laptop might be stolen, or a programmer working on a financial services network could acquire banking customers’ account information and passwords and use them to steal money from their accounts. If this happens, fidelity bond insurance reimburses your client for the money or property that has gone missing.