Professional Liability Insurance can provide protection for IT consulting firms and the myriad of services a consultant might provide. Professional liability also covers some risks that are typically not covered under general or cyber coverages, such as those arising from contract law breaches and intellectual property infringement claims.
For example, an IT consultant should have professional liability in the event they are accused of making a professional error, failing to deliver promised results or claims of professional negligence.
What is professional liability insurance?
Professional Liability Insurance (or E&O) provides protection to consultants and businesses who provide services. It’s also sometimes known as errors & omissions, or afloat policies; these can be taken out by either an individual in their own capacity as well as those offering such services through others.
Errors and omissions (E&O) insurance is not a replacement for general liability but an addendum. The complex needs of the IT industry (cybersecurity, copyright infringement, breach of contract, etc.) require an insurance plan that’s designed for a consultant’s specific services. The best way to build that plan is to work with an insurance agent who understands the IT industry.
How can professional liability insurance protect IT consultants?
E&O insurance covers your business from unintentional errors that could cause financial losses or damage to your clients. That includes professional errors like verification mistakes, documentation errors, or failing to protect clients’ property or data.
It also protects your business from misrepresenting your products or services and failing to deliver promised results to your clients. If your employees break legal or state laws, breach a contract, or give poor advice to your clients, your business will be covered under professional liability insurance.
What are the risks of not having professional liability insurance?
Without professional liability insurance, your company could be responsible for actual losses incurred and reparation for damage to a client’s reputation. However, with insurance, your company would be covered as long as the incorrect information was entered by accident or an error was unknowingly made.
If your company is uninsured, you are at a significantly greater risk of lawsuits that could leave lasting financial wounds. You are also at risk of losing business and damaging your reputation. Many people want proof of insurance before they will even hire you.
It doesn’t matter how experienced and professional your employees are. Humans make mistakes, whether they are intentional or accidental. Investing in professional liability insurance is a good way to protect your company from accidents or mistakes that could otherwise cost your business.
How can Post Insurance help?
Post Insurance is a third-generation insurance agency with expertise in personal and commercial insurance of all types. If you have questions about your insurance needs or would like to receive a quote, please fill out our contact form or call 800.262.9998.