Are you starting your own information technology (IT) firm? The following Trusted Choice® article perfectly summarizes the types of insurance you will need for your new business.
Starting your own company means dealing with some business essentials that may not be as exciting as seeing your code perform a function seamlessly for the first time.
For example, insurance.
You probably already know that, as a business owner, you’re required to insure certain things, such as autos, leased hardware or employee welfare (workers’ compensation). But you may not know about the optional types of insurance that can be just as important to keeping your business going and growing. Your Trusted Choice® Independent Insurance Agent can help you determine if you need the following types of insurance for your IT startup.
Does your startup funding include enough money to purchase the equipment you need? Or will you need to lease computers and hardware? No matter who owns your equipment, you will need property or equipment insurance to cover losses to it caused by fire, lightning, smoke, theft, water and other causes of damage.
Some property insurance policies can also be modified to cover computer viruses, malicious code, malware and other technology-based sources of damage.
If you use mobile equipment like laptops and phones, your Trusted Choice Independent Insurance Agent can help you be sure that your coverage extends away from your place of business.
Imagine that your place of business — where you keep your network server hardware — is damaged in a windstorm or fire. Would your business be able to initiate a backup plan immediately that would keep you up and running? Or would it take some time to get back to full operational capacity? Business income insurance will cover your lost income and pay your continuing business expenses (like payroll, rent and insurance premiums) while your business is sidelined due to property damage.
Your business may need a general liability policy for claims of bodily injury or damage to tangible property caused by your business operations. For example, if you drop a hand tool that damages a client’s server hardware, you could be on the hook for the cost of the repair or replacement unit.
Note that most general liability insurance policies will not cover damage your operations cause to intangible property, such as accidentally deleting your client’s data with corrupt software.
This unique insurance covers your startup business for liabilities created by improper online conduct.
Covered claims may include copyright infringement, defamation or violation of privacy.
Have you considered that a client could sue you due to financial damages they suffer resulting from your work? Say, for example, you inadvertently disable or destroy a client’s network or website and their downtime costs them big bucks. Professional liability insurance will protect your business when a client suffers damage resulting from your business’s inability to fulfill its professional standard of care. It’s important to know that general liability insurance will not cover claims of this type.
Do you or your employees drive to clients’ offices? If you purchase a vehicle through your business, you’ll need a commercial auto insurance policy.
If you, your employees or your contractors use personal vehicles for company work, your business needs insurance protection from accidents resulting from such non-owned vehicles. Be sure your commercial policy is amended to include this coverage. If you do not have a commercial auto insurance policy, you still may be able to purchase non-owned auto liability for accidents caused by employees or contracts using their personal autos.
If you plan to rely on your own vehicle to visit clients, contact your personal auto insurer to determine if this business use will limit or eliminate your personal auto insurance coverage should an accident occur.
Workers’ compensation is for employees who suffer job-related injuries. For example, who pays the medical bills if your employee strains her back while crawling under a client’s desk to install a network cable? Of if your programmer needs treatment for wrist pain caused by too many hours at the keyboard? If you have only a few employees, your business may not be required by law to purchase workers’ compensation insurance. You’ll want to consult your Trusted Choice agent to learn the requirements in your state and to discuss what would be best for your company. Even if it’s not required, you might want to purchase workers’ compensation insurance. It could save your business from having to compensate injured employees out of pocket.
Using Independent Contractors?
When you need help, you may decide to rely on the services of independent contractors rather than hiring employees. For your protection, you must require any independent contractor you engage to show you proof of — at a minimum — their own general liability, professional liability and workers’ compensation insurance. If your contractor doesn’t have these coverages, you could find yourself on the hook for damage they cause or personal injury they incur while working on your behalf.
There’s Help for You
It can be overwhelming to think about business insurance, but your Trusted Choice Independent Insurance Agent thrives on the challenge of helping you protect yourself and your business. Make an appointment today. Let your agent provide you peace of mind about insurance, so you can focus on the exciting future of your IT startup.