Finding the right insurance for your system integration firm is an important step in protecting your business and achieving long-term success.
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In order to protect yourself financially against lawsuits, accidents, or disasters, consider purchasing business insurance. Control system integrators are often required by clients to hold certain levels of insurance coverage before working on a project. Moreover, having a comprehensive insurance package can give your customers peace of mind when working with you. You should consider purchasing business insurance for your control system integration business if:
- You would like to insure your services and practice against claims of poor performance or errors in your work
- You are contractually obligated to obtain insurance
- You store sensitive customer or employee data
- You employ others
- You provide benefits to your employees like health insurance or retirement plans
- You work in an office that you lease or own
- You store valuable equipment or property in your office
- Customers or clients visit your office
What insurance coverage do I need as a control system integrator?
Control system integrators deal with complex and highly detailed technologies and processes, and as such, even a small error can lead to disastrous results. That’s why professional liability insurance is such a crucial coverage for system integrators to obtain. Moreover, system integrators face many of the same risks that other businesses encounter, which is why more common policies like general liability insurance and workers’ compensation insurance are important to consider as well. While there are a number of policies to look into, below we’ve listed the major insurance coverages you should consider.
Professional Liability Insurance or Errors and Omissions (E&O) Insurance
Due to the complex nature of your profession and the highly sophisticated systems you work with, the margin for error is particularly slim. Even the tiniest of mistakes can have serious financial repercussions for your clients. If your customers believe that the work you performed was substandard or error-prone and it hurt them financially, they can sue your firm for damages. Professional liability insurance can protect you from the financial repercussions of a client lawsuit stemming from your firm’s professional mistakes. Even if your firm is not at fault, you may still be sued. Covered areas for professional liability insurance include negligence, misleading statements, performance, and breach of duty.
- Errors/Negligence: One of your employees plans a system without performing the appropriate research to determine if it meets the production output needs of the manufacturer. The manufacturer sues you because the solution cost them time and money but did not create the results they were looking for.
- Performance: Your company writes a program that does not work and leads to manufacturing delays. The client loses money repairing it on their own.
- Lawsuit without merit: You create a quality management system for a new client. Although the client initially says that they are satisfied with the plan, they later decide that it is not what they wanted and they sue.
General Liability Insurance
General liability insurance can help protect you and your firm from the financial burden of a lawsuit that claims personal injury, client injury, or accidental property damage. It’s difficult to be certain how careful individuals will be when visiting job sites or when clients visit your office. General liability helps to safeguard your business against lawsuits from clients or third parties. The four types of coverage included in general liability insurance are: products & completed operations, property damage, bodily injury, and personal & advertising injury.
- Property damage: One of your employees is visiting a potential client at their new manufacturing facility. As he reviews their current automation systems, he accidentally turns on the injection molding line, causing damage to the potential client’s machinery.
- Bodily injury: A potential client visits your office to discuss their manufacturing goals. As they are leaving, they fall in the stairwell and tumble downwards to the garage. They break their leg and have to be transported to the hospital in a colleague’s car. Still, they believe your firm is to blame and want to sue you.
- Advertising injury: A new control system integration firm opens up in Cincinnati, where you live. Your business releases a series of ads that attack the new rival firm, claiming that you are, “better, faster, cheaper, and less prone to error.” The firm hears about what you have done, and sues your business for advertising injury.
Commercial Property Insurance
Commercial property insurance protects your business property from damage caused by covered perils, typically including fire, windstorms, water damage from burst pipes, vandalism, and many other hazards. The included damage can happen to a building or item that you rent, lease, own, or have borrowed from someone else. Covered items include, but are not limited to: paintings, furniture, office equipment, and computers.
- Buildings: A colleague is working on a project late into the night. They bring a pot of coffee into their work area, but accidentally spill it on a socket. The electrical wire plugged into that socket short circuits. The resulting fire manages to completely char half the work area before another colleague can put it out. You now have to pay to repair the damaged walls.
- Contents: The sprinkler system in your office goes off after winds carry smoke filled air into your office building. Desks, chairs, and laptops are left soaking wet overnight. You must pay to replace these items.
- Property of others: You are on the floor of a toy factory performing a preliminary consultation. You want to get a better look at some of the wiring but accidentally rip it out when you hear a loud bang coming from the room next door. The machine won’t work without the wires and must be repaired. You must cover the cost that it will take to replace and restore the wire to its original state.
Cyber Liability Insurance
In today’s hyper-connected world, much of the data, files, and records you work with will be stored on both public and private servers. Everything from client files to employee records are housed in some digital form, and because of this, sensitive and confidential data may be at risk of loss or theft. That’s why it’s important to guard your business against the negative impact of any technological mishaps. Cyber liability insurance can protect you from the financial consequences of hacking, viruses, data breaches, and other cyber perils.
Cyber liability insurance also covers the costs of:
- Lawsuits against you for lost data
- Notifying customers and business partners about a data breach
- Marketing to restore your reputation
- Lost income
- Lost or damaged electronic data
- The control system software you’ve deployed at a client’s factory included a hidden virus, which ends up infecting your client’s network and sending your client’s proprietary data to an unknown group of hackers. The client sues you for damages.
Workers’ Compensation Insurance
While general liability insurance can cover the cost of injury to a person who is not employed by your firm, workers’ compensation covers work-related injuries and illnesses for your own workers. Almost all states require some form of workers’ compensation if your company has employees, though requirements for coverage vary by state. Receiving workers’ compensation benefits means employees also agree not to file a personal lawsuit against your company in the event of an injury. Workers’ compensation is no-fault, which means that it pays benefits regardless of whether the employer or employee is at fault for the injury.
Workers’ compensation can cover the costs of:
- Funeral expenses
- Disability benefits
- Medical expenses
- Rehabilitation costs
- Death benefits
- A portion of lost wages
- You send an employee down to the manufacturing floor to investigate a laser cutting machine that doesn’t work. While moving the part around, the machine suddenly starts up again and cuts his dominant arm and hand. He must go to the hospital, where he is required to stay overnight due to an infection risk. Workers’ compensation covers the cost of the hospital visit as well as the three days of wages he lost by being there.
Business Owner’s Policy
A business owner’s policy, also known as a “BOP,” combines property, general liability, and business income and extra expense insurance coverages for qualified small businesses. By combining these coverages together, your control system integration firm can save on premiums, as there may be discounts available for bundled policies.
As a control system integrator, it is your job to see the bigger picture and ensure that productivity stays at its peak. Though you may be certified and capable, mistakes can happen, and your firm may be sued by unhappy clients. One of the most important coverages for system integration firms is professional liability insurance. With a professional liability policy, your firm can protect itself financially from lawsuits related to your work. Moreover, other coverages like commercial property and general liability insurance can protect you from the unexpected dangers that all businesses face, including natural disasters and slip-and-fall accidents. It’s wise to be concerned about the financial safety of your business. Consider purchasing a comprehensive business insurance package in order to protect both your business and your employees.