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Check the wording of your IT industry insurance policy

09/02/2011

Industry reboot

Not too long ago, if you met someone at a party, asked them what they did and they said "I’m in IT", you’d have a pretty good idea of what that meant. Computer stuff, basically.

Ask the same person that question today and you might get an answer like: "I design networks" or "I develop apps" or even "I’m an SEO and Google analytics consultant specialising in social media and online PR".

That’ll have you nodding thoughtfully, for sure. And maybe questioning the type of parties you go to …

IT girls and IT guys

So what does all this mean? Well, it goes to show that there isn’t really such a thing as an ‘IT guy’ any more. As technology develops and becomes more specialised, the skills and expertise required to understand and apply that technology become more specialised too.

Granted, any two consultants might be considered IT people and both might work with technology, but the risks they face could be completely different.

For example, a web designer could face claims for copyright and intellectual property infringement; a software consultant could face claims of breach of contract due to failure to deliver the right spec software.

Two roles, same industry, different risks.

Personal firewall

Now, most decent insurers are aware of this and – all credit to them – have designed specific professional indemnity insurance policies to cover these risks. It’s still worth having a long, hard think about the work you do, however, and checking the cover you have is the cover you need.

Insurance for the IT industry should cover these risks

If you have a professional indemnity policy already, check the wording to make sure it’s IT-specific rather than miscellaneous or generic. Ideally, it should include cover for claims arising from:

  1. Supplying things like hardware or software.
  2. Use of third-party content (like pictures, video or music).
  3. Negligent virus transmission.

Also, check the level of cover is enough. You don’t want to be left high and dry if a client sues you for more than your policy will pay out.

How do you know how much is enough? Think about these things: if you make a mistake, what’s the worst-case scenario amount of money needed to fix it? How expensive could it be to defend yourself if you’re dragged into a dispute? (Answer: very.)

And finally, just to be sure, it’s a good idea to talk it through with someone who knows. Someone like a professional indemnity insurance broker for example.

 
 

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