As an IT project services firm, your company is open to the same risks that are common to most businesses, such as fire, theft, or someone suffering an injury on your property. In addition to these risks, it’s important to consider the risks that are particularly significant for IT project managers. Your clients rely on your services for managing and successfully executing complex IT projects, and if your clients are unhappy with the result, your business could be sued. It’s important to consider purchasing insurance coverage to financially protect you from these and many other common risks.

What insurance coverage do I need for my IT project management company?

While there are many types of coverage for companies to consider, these insurance policies are particularly important for IT project managers to consider:

Professional Liability Insurance

When you provide project management services in the IT sector, clients expect you to plan, manage, and execute projects effectively. Since companies often depend on IT services to conduct their business, errors or omissions can have a major financial impact. No matter how meticulous you are in your work, mistakes can still happen. Clients can sue your firm if they believe your negligence or errors caused financial loss. Professional liability insurance can protect your company from the risk of lawsuits brought on by dissatisfied clients alleging failures in services, advice, or professional work. This type of insurance is critically important in the project management space, as much of your work revolves around providing professional services and advice.

Example:

• While managing a client’s network upgrade, your employee misconfigures a server, causing intermittent outages for your client. Because of the outages, your client is unable to provide service to a subset of customers, causing a flood of customer complaints and cancellations of service. The client sues your firm for damages. Your insurer would cover the lawsuit and any damages or settlements.

Cyber Liability Insurance

In the IT industry, your business depends on digital systems and networks that may be vulnerable to cyberattacks. Since cybercriminals frequently develop new methods of breaking into digital systems, there’s always a risk of hacking, no matter how many precautions you take. If hackers are able to access private data through your systems, you could be held liable. 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 company’s computer network is infected with a virus that spreads on all of your connected computers. The virus gives outside hackers access to your network, exposing confidential data on your employees, vendors, and customers. The news gets out, and your customers are furious. They sue your firm for mishandling their private data. Your insurer will pay for any legal costs, as well as the costs to notify all affected parties and hire technical consultants to fortify your network security.

Commercial Property Insurance

If your IT business owns or rents office space or relies on computers and other valuable equipment, you should consider purchasing commercial property insurance to protect the value of your business property. If an unexpected disaster occurs at your offices, repairing or replacing your damaged property can be costly. Commercial property insurance will help your company recover if a catastrophe damages or destroys your business property. Commonly covered perils include fire, windstorm, hail, water damage, and vandalism.

Commercial property insurance covers the following:

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

Example:

• An overloaded circuit starts an electrical fire in your offices, damaging the building as well as valuable computers and equipment. Your commercial property insurance will pay for the cost to repair the building and replace computers and other damaged items.

General Liability Insurance

General liability insurance can protect your IT business if you physically injure another person or cause damage to someone else’s property. While generally not required by law, general liability insurance is widely considered essential to running any type of business. If you are renting office space, in particular, general liability insurance may be a requirement of your lease. Most companies have some level of general liability risk, even if they work in industries that are not physically dangerous. General liability insurance covers third-party bodily injury and property damage risks, as well as personal and advertising injury.

Examples:

• Bodily injury: A vending machine technician visits your offices to refill your vending machines. The technician trips on an uneven carpet and falls, fracturing an elbow. Your general liability insurance would cover medical costs and legal costs if the technician sues.
• Property damage: Your employees visit another company’s offices to discuss a project. They accidentally knock an expensive sculpture off its pedestal, destroying it. Your general liability insurance would pay for the damage.
• Personal and advertising injury: Your IT project management firm 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.

Additional Coverage

• A business owner’s policy combines general liability, property, business income, and extra expense coverage into a single package. For small or midsize companies, this type of insurance could help you obtain a wide range of coverage. Premiums for a business owner’s policy are typically cheaper than the cost of buying each coverage separately.
• Business income insurance will reimburse you for lost income and operating expenses if your business is unable to operate due to a covered reason, such as fire, storm damage, or other property damage.
• In most states, workers’ compensation insurance is legally required for companies with employees. It covers the medical expenses and lost income of employees who are injured or fall ill while working. For IT companies, repetitive strain injuries are common sources of workers’ compensation claims.
• Employment practices liability insurance protects against lawsuits filed by employees against your company. Specifically, EPL insurance protects against suits involving claims of wrongful treatment, such as discrimination or harassment, and covers any judgments or legal fees associated with these claims.

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, an IT business 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 IT businesses:

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

Final Word

When your company provides IT project management 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. Purchasing the right insurance policies for your company’s needs can provide you with invaluable financial protection. With a wide range of insurance coverage, you and your clients can feel confident that your company will survive an unexpected disaster.