Business Insurance For IT Professionals

Compare business insurance quotes with Savvy to find the best policy for IT professionals. 

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, updated on July 17th, 2023       

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It doesn’t matter whether you’re employed as a consultant, contractor or simply work for one company, as an IT professional, plenty rides on your knowledge and expertise. Businesses are often reliant on their IT systems working seamlessly, so when things go wrong, it can cause a massive disruption to the operation of the company. This is why it’s vital for IT professionals to have good business insurance coverage. 

You can compare quotes for all types of business insurance here with Savvy. Just answer a few simple questions about the work you do, or the consultancy business you run, and you’ll have a range of quotes from some of the most respected insurers to compare instantly. Use our quick and easy comparison service to help you find the best value insurance for your IT business today.

What types of insurance should I buy for my IT business?

The types of business insurance you should consider if you run an IT business include: 

Professional indemnity insurance 

Professional indemnity insurance covers you against claims that the advice, recommendations or service you provided were either incorrect or negligent. It’s an important type of insurance to have for anyone who offers advice or services in the IT industry because there are so many moving parts, many of which may be out of your control (such as network outages or the failure of satellite or telecommunication services). Cover is available starting from $250,000 up to $10 million or more. 

What it covers 

  1. Payment of compensation if there’s a successful claim against you 
  2. Payment of court-awarded damages to the litigant 
  3. Cover for your legal defence costs 
  4. Cover for the cost of disciplinary proceedings or investigations 

Public liability insurance 

Public liability insurance is essential for anyone who deals with members of the public, including your customers or clients. It will cover you against claims that your business activity caused injury to a member of the public or damaged their property. Because this insurance involves cover for personal damages allegedly caused by your business activity, there can sometimes be an overlap with professional indemnity insurance arising from the work of an IT professional. This insurance can offer between $5 million and $20 million worth of coverage. 

What it covers:  

  1. Third-party personal injury claims 
  2. Damage to a third party’s property 
  3. Legal fees to defend yourself 

Cyber liability insurance 

As an IT professional, you know the risks posed by various forms of cybercrime. For this reason, cyber liability insurance is also a very important form of insurance for all IT consultants and IT contractors, as well as those who run their own IT business. 

What it covers 

  1. Data breaches including theft of client information 
  2. The cost of a forensic investigation into the cause of the breach 
  3. Data recovery costs 
  4. Cyber extortion and denial of service threats 
  5. Crisis management costs 
  6. Advertising and communicating with customers 
  7. Legal costs including any fines and penalties imposed 

General business insurance 

General small business insurance may also be worthwhile if you run your own office or have portable equipment such as laptops which you wish to insure. Commercial vehicles aren’t included, so you may need separate commercial vehicle protection for your work vehicle.  

What it covers: 

  1. Fire, storms, theft, vandalism and collision which cause damage to your business assets 
  2. Specialist cover for electronic equipment and other portable equipment  
  3. Limited business interruption insurance 

What isn’t covered under my IT professional’s business liability insurance?  

The most common general exclusions include: 

  1. Injury to yourself or your employees 
  2. Flood damage 
  3. Glass breakage (available as a separate add-on with general business insurance) 
  4. Unlawful activity or criminal negligence 
  5. Reckless behaviour or intentional damage 
  6. Anything to do with asbestos 
  7. The effects of pollution caused by your business activity 
  8. Damage to computer hardware 
  9. Upgrading of a system not related to the cybercrime 
  10. Power outages or failure of satellite or telecommunication services 
  11. Prior known circumstances or risks 

How much will my IT business insurance policy cost? 

There is no set cost for an insurance policy, as each applicant is different and faces unique risks.  The cost of insurance will be different for a single IT contractor as opposed to someone running an IT consultancy company. Many factors influence the cost of business insurance, including the following:  

  • The state you’re in  
  • Whether you live in a rural or urban area 
  • Whether you’re a sole trader, are in a partnership or run a larger business 
  • Your business size and turnover  
  • If you have any employees 
  • Your credit history 
  • Your insurance history 
  • Whether you’ve made an insurance claim in the past five years 

The main factor which will affect the cost of your insurance is the industry you’re in. All businesses in Australia are classified according to the risk their industry poses and are allocated a risk ratio. These ratios are used by insurers to calculate the comparative risk of any one business compared to another.  

However, the location of your business does influence the cost of your insurance. For example, an IT company’s quote for insurance in Tasmania may be different to one for a business located in Western Australia.   

You can find out how much insurance will cost for your particular business by comparing quotes right here with Savvy.

Why do I need business insurance as an IT professional?

You’ve worked hard to set up your IT consultancy business, so it makes sense to want protection in case anything does go wrong. We all know that cybercriminals are active, so it makes good sense to ensure you have maximum protection in case criminals do get through your defences or manage to access your confidential client information. 

Most IT professionals who run a consultancy business have some contingency funds to fall back on, but they’re rarely sufficient to cover the cost of a major catastrophe. If you have strong business insurance coverage, you can enjoy the peace of mind that comes with knowing you’re fully protected just in case your worst-case scenario does occur. 

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Frequently asked questions about business insurance for IT professionals

If my client suffers a hacking attack, can I be held personally responsible as an IT consultant?

This may depend on the terms under which you are engaged or employed. Your engagement contract may address this issue. However, if you do have cyber liability insurance as part of your general business liability package (or as an add-on which you have selected), you’ll be covered in case your client decides to sue you or your business. 

What other forms of insurance are available for IT professionals?

It’s possible to get other forms of insurance designed specifically for IT engineers and developers, including product liability insurance (which can cover software and is often packaged with public liability insurance). When you’re considering what insurance you need for your business, look at all the different types of cover on offer and decide which are most appropriate for the services you offer. 

What information will I need to make an insurance claim?

The information you should have to hand when you contact your insurance company to make a claim will include: 

  • The name of the policyholder 
  • Your policy number and start date (which can be found on your Certificate of Currency) 
  • A detailed description of the incident (what happened to cause the damage or loss) 
  • Specific dates and times when the incident happened 
  • Contact details of any other parties involved (or witnesses to the event) 
  • Details of your police report number (if a crime took place) 
  • Details of the property lost or damaged (including its age and value) 
  • Your bank details for settling the claim 
Are my IT business insurance premiums tax-deductible? 

The Australian Taxation Office recognises that having business insurance is a legitimate cost of doing business, so the full cost of your insurance premiums can generally be claimed as a business expense and offset against your income. This applies to all IT professionals as well as other related fields, such as graphic design. However, it’s always worth seeking independent tax advice to find out what you can and can’t claim as a tax deduction on your tax return.

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