If your company focuses on database management, design, or administration, there are particular risks you should consider as you select insurance coverage. From professional negligence lawsuits to cyberattacks, your company faces many potential liabilities. It’s important to consider purchasing comprehensive business insurance coverage to financially protect you from these risks.

What insurance coverage do I need for my database administration company?

There are many types of insurance for companies to consider, but these are particularly important for database administrators:

Professional Liability Insurance

If your company focuses on database design, administration, or consulting, clients rely on you to help them manage their databases correctly. If you make a mistake, it could have a major impact on their business and cause them to lose valuable data, which could be costly. If that happens, you could be held liable and sued. Professional liability insurance can protect your business against these risks by covering lawsuits and damages brought by dissatisfied clients.

Example:

• Your company is hired to migrate an e-commerce retailer’s customer database to a new system. Unfortunately, during the migration, one of your scripts fails, causing some of the data to be corrupted and bringing down the client’s e-commerce website temporarily. The outage results in tens of thousands of dollars of losses for the company. The company sues for damages. Your professional liability insurance would cover the lawsuit and any resulting settlements or judgments.

Cyber Liability Insurance

Cybersecurity is an ongoing concern for modern companies because electronic systems and networks have become so fundamental to everyday business. Hackers are constantly targeting companies with data vulnerabilities and these cyber criminals frequently develop new methods of accessing systems. Even if your company implements comprehensive cybersecurity protections, there’s always a chance that criminals could somehow gain access to your network and steal data or hold it for ransom.

This is especially relevant when you work with databases that could contain valuable or personally identifiable information. If hackers are able to access confidential data through one of your systems, you could be held liable. The costs of recovering from a cyberattack are high, and news of hacks can damage your reputation among clients as well. Cyber liability insurance can provide financial assistance to help your company stay in business in the event of cyberattacks, and insurers often provide resources to help you prevent incidents as well.

Example:

• Your firm builds a new database system for a bank. They send you part of their customer data, which you store on your servers while developing the system. A loophole in your network security allows hackers to access the data and steal personally identifiable information on the bank’s customers. The bank sues you for failing to prevent the hack. Your insurer will pay for your legal fees and any settlements or judgments in the case.

General Liability Insurance

Most companies have some level of general liability risk. If your company hosts clients at its offices, visits clients at their locations, or is visited by suppliers or vendors, there is a risk that someone will be injured or property will be damaged. It’s a good idea to consider general liability insurance to protect your company from these risks as accidents can be unexpected and happen at any time. General liability insurance covers third-party bodily injury and property damage. It also includes a personal and advertising injury component, which provides coverage for a number of risks, including libel, slander, and copyright infringement.

Example:

• Property damage: Employees of your IT firm visit a client’s offices to consult on their database needs. One of your employees trips on an uneven carpet and knocks over a valuable piece of art, destroying it. Your general liability insurance would pay for damages.
• Bodily injury: While visiting your offices to discuss a project, one of your clients slips on a wet floor, severely spraining an ankle. Your general liability insurance would pay for medical costs and legal costs if the client sues.
• Personal and advertising injury: Your database consulting company publishes a blog. One of the blog posts contains false statements about a competitor. The competitor sues your company for libel. Your general liability insurance would pay for the lawsuit and any settlements.

Commercial Property Insurance

If your company operates from owned or rented office space and relies on technology such as computers and servers, then you may benefit from commercial property insurance. If an unexpected disaster damages or destroys your property, it can be difficult and expensive to recover from the loss. Commercial property insurance can help your company recover if your property is damaged.

Commercial property insurance covers the following:

• Buildings belonging to or leased by your company
• Contents of the building, including computer equipment, office furniture, and artwork
• Property of others while it is under your care, custody, or control

Example:

• An employee plugs in a new toaster oven into an already overloaded outlet in your office’s break room, causing an electrical fire to start. The fire ends up damaging the break room, including furniture and kitchen equipment. Your insurer will pay for repairs to the building and to replace the equipment.

Additional Coverage

• A business owner’s policy can be a great choice for small and midsize businesses. It combines general liability, property, business income, and extra expense coverage into a single package, which is often cheaper than purchasing comparable coverage separately.
• Commercial auto insurance is necessary for any company that owns one or more cars titled under its name. It covers bodily injury and property damage if the driver of the vehicle is at fault in an accident, as well as the value of the vehicle itself if it’s damaged by a collision or another peril.
• Business income coverage will reimburse you for lost income and operating expenses if your business is forced to close due to a covered peril, such as fire, storm damage, or other property damage.
• Workers’ compensation insurance is legally required for companies with employees in most states. It covers the medical expenses and lost income of employees who are injured or fall ill at work. For businesses in the IT sector, workers’ compensation is important as repetitive stress injuries are common among office workers.
• Fidelity bonds protect your business from losses caused by theft, fraud, or dishonesty committed by your employees. This coverage would protect you if an employee unlawfully accesses confidential customer data.

Pricing and Quotes

Pricing for business insurance will vary based on the type of insurance coverage and the risk profile of your business. Insurers consider factors such as:

• Business size
• Industry
• Location
• Number of employees
• Claims history

Businesses with higher risks will have higher premiums than those deemed lower risk. For example, a technology company with a history of frequent claims will face higher premiums. Premiums also rise as you increase the limits of insurance. Different insurance companies have different models for rating risks, so it is worth comparing pricing across different insurers.

In order to get an accurate estimate on pricing, it’s best to get a quote from a reputable insurance company. Below we’ve highlighted a few of our trusted partners who offer coverage for technology businesses:

Provider	General Liability	Professional Liability	Business Owner's Policy
Embroker	??	??	??
CoverageSmith	??	??	??
CoverWallet	??	??	??
Hiscox	??	??	??
Thimble	??	??	??

Final Word

When your company provides database services, you open yourself to a variety of professional risks, as well as risks that are common to most companies. Lawsuits brought by unhappy clients, physical damage caused by a disaster such as a fire, and cyberattacks are all risks that could have a major impact on your business. It’s important to financially protect your company by purchasing the right insurance policies for your company’s individual needs. With a wide range of insurance coverage, you and your clients can rest assured that your company will survive an unexpected disaster.