IT Insurance for IT Professionals
From Hardware Installations and Sales, Engineers and Project Managers, through to App and Web Designers; every IT business is different from one to the next. We understand this. This is why we help you customise your insurance to best fit your business.
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What are the typical insurances for the IT Industry?
IT INSURANCE PACKAGE
The first and most common type of insurance for the IT Industry us an IT Package. The IT package combines your professional indemnity insurance and public liability insurance together into the one policy, usually with the same insurer. This is important for the IT Industry Insurance to have both covers with the same insurer due to the cross over between a loss caused by physical action and professional conduct, particularly with remote services or software coding.
The professional indemnity component protects you against alleged professional misconduct, an error by you or your team (or your contractors), or a failure in your design (coding) which then causes a financial loss to your customers.
The Public Liability within the IT Insurance Policy responds to the damage to property of others, or injury to others, resulting from the negligent action(s) by you or your team. In most IT policies, they also include cover for the products that you sell.
When setting up a policy for IT Insurance, you will want to check the following information is correct on your policy:
- The named insured.
- Is your policy in your personal name or the name of your company? Regardless of how you operate your company, whether it is pty ltd company, a partnership, a sole trader or out of a trust; you need to ensure that your policy has the right name on it as that is who the policy protects. If you aren't sure what name you should use, you can either look up your ABN with ABN Lookup and make sure that name is listed correctly on your policy or contact your accountant for advice
- Are all your activities listed?
- An insurance policy is a contract. If you haven't listed all of your activities you may not be insured correctly if something goes wrong. Have a look at your insurance schedule or the application form. A schedule that shows 'computer shop' or 'retail computers' isn't going to be suitable for an industrial software engineer or even for a mobile phone app designer
- Do you sell your products overseas or have customers that you service overseas?
- Many Australian policies are limited to providing cover for customers who are both domiciled (registered) as an Australian business and service other customers located within Australia.
- You should check if your policy on the schedule or within the policy booklet has any 'Geographical Limits or Limitations' as these are the boundaries within which you are insured to provide your professional services. This is very important for online app and software developers where your customers can purchase and download your software from anywhere in the world.
- A common exclusion is any services provided to the USA or Canada. It is possible to extend cover to these areas for an additional premium.
- Do you use contractors?
- A number of policies available exclude loss or damage caused by contractors and rely on you checking your contractors have insurance in place. But, what happens if your customers server is damaged and they lose income as a result? Who is your customer going to go after? You. If you use contractors, you need to know that your policy will cover you for the work done by your contractors, even if the contractors have their own insurance.
- Are you exposed to Cyber Crime and is Cyber Crime extended on your policy?
- We talk more about cyber crime below.
A business insurance package is required to supplement the IT package for most business operators. The IT Insurance package doesn't cover any of your equipment, stock, or your customers goods for damage through fire, storm, malicious damage or theft.
For smaller contractors working from home, it will be important for you to check with your home insurer to let them know that you are running a business from home and to see whether that policy will cover equipment owned by you or stock that you have at your home. In most cases the policy will only provide very limited cover and often will not cover any loss of income to your business as a result of damage or theft at your home.
The loss of income cover within a business package is often overlooked by IT professionals who see themselves as not restricted to a particular business premise, but, what if there is a short term restriction like the NSW April 2015 storms or the South Australia Oct 2016 storms which both saw a majority of homes and businesses without power across the state.
Can you operate your business without power or would it result in lost income and potentially lost customers if you cannot respond to their needs during that time?
CYBER CRIME AND CYBER LIABILITY
This type of insurance is equally important to you as it will be to your customer. A business insurance policy doesn't cover loss or damage arising from Viruses, Trojans, Hacking or most other cyber crimes. That's where a Cyber Crime and Cyber Liability policy comes in. A Cyber Crime policy generally has three parts.
- Cyber Crime cover for your Assets.
- This part of the policy responds to the damage to hardware or software assets as the result of a cyber breach. Whether this is the costs of unlocking or replacing a machine locked by cryptolocker, regaining access to your website after it is hacked, or locking and recovering data from hardware that has been stolen or lost.
- Loss of Income following cyber crime.
- The loss of income section of a Cyber policy is as the name suggests. The consequential loss of income or extra costs incurred by a business following that Cyber Breach. This extra cover is not typically included when you take a "Cyber Extension" within your Professional Indemnity Cover or Management Liability cover. It is only available with selected insurers.
- This cover is however one of the most important inclusions for any business that runs an online store to protect their revenue generated by their online store, it really is like a business insurance for online shops or online stores to protect the asset and the consequential loss of income.
- Cyber Liability
- A cyber breach into any network usually involves a breach of data or a loss of data. If this data belongs to someone else, such as a customer of yours, it can result in you being liable for whatever costs are incurred by that customer as a result of that breach.
- In Australia we also have strict privacy laws that extend to customer data. A breach of customers data can also result in fines or penalties. This is another reason to take the Cyber Liability cover as part of your Cyber Insurance protection.
WORKERS COMPENSATION AND INJURY COVER
It is compulsory in most states within Australia to provide workers compensation insurance for your employees. if you are the director of a company, the rules to differ from state to state on whether you have to take insurance for yourself. It is compulsory in NSW, in some circumstances it is optional in WA and not available in QLD. If you aren't sure whether you should or can obtain workers compensation insurance for you or your business, you should contact us on 1300 429 707.
If you send businesses overseas to service customers overseas or to attend global conferences you should consider a Corporate Travel Insurance or Expat Medical Insurance to cover your employees whilst overseas as your Workers Compensation policy wont cover them whilst they are out of the country, even for work purposes and many online travel insurance policies are only for leisure travel with lots of restrictions on what they do and do not cover.