IT Consulting or Programming insurance – cost and types of policies

Whenever you budget the expenses of your business, IT Consulting or Programming insurance must be included in the list because you can’t always know exactly what is going to happen in the future.

With the protection provided by liability insurance and all the other kinds of insurance we will tell you about, you can protect your business and yourself in case something unexpected happens.

Like any business owner, for your IT Consulting or Programming enterprise, you must consider how much financial danger you are taking on.

If your IT Consulting or Programming business runs without proper insurance, you are taking a giant chance not just of losing some money but of a total wipe-out.

This is because the laws in every state are very strict in enforcing liability on the owners of businesses for the consequences of their actions. 

In this article, we are giving very general guidelines for small businesses to explain what the main kinds of insurance that you need are, and where we can, a rough guide to how much you can expect to pay.

The question is, can you afford to NOT have insurance for your IT Consulting or Programming business?

What this means, for any IT Consulting or Programming business owner, is that if some company claims that your work caused them some physical or economic damage, a court can award damages far beyond the total size of your business.

Your IT Consulting or Programming business is not harbored by laws in the same way as states are, where edicts can place a “cap” on the maximum level of liability.

In some states, like New Jersey, there are specific monetary levels that limit the amount a court can award in any case against the state.

In a court case, it’s purely the right of the jury to award whatever amount they deem appropriate, even sometimes giving a claimant more than they have claimed.

When you are running your IT Consulting or Programming operations, you can’t avoid responsibility for the results of your actions.

Even more importantly, unless you have spent in advance the money necessary to have your business running as a corporation, all of that liability belongs to you alone.

What does IT Consulting or Programming insurance protect you from?

For your IT Consulting or Programming business, the most important kinds of insurance are meant to cover the risks to your business from accidents, from unexpected events, and from mistakes.

In addition there are some mandatory kinds of insurance that various states require.

In the next few paragraphs, we will outline the most important points any IT Consulting or Programming business owner should know when negotiating the insurance needed.

The main headings of insurance for your IT Consulting or Programming businesses are liability insurance, commercial insurance, asset insurance and workers compensation insurance.

Liability insurance

General liability insurance

Any IT Consulting or Programming business is dealing directly with customers, and that means you generally have the danger that some accident can happen to them themselves or else something of theirs can be damaged.

In such a case, they can require compensation.

General liability insurance policy for your IT Consulting or Programming business covers you against claims coming from injury to visitors or damage to their property.

It protects your IT Consulting or Programming business from the claims themselves and as well to any resulting court costs and legal fees of the lawsuits.

In many cases, it will even help you to qualify for extra business from city and state organizations, where contracts demand proper liability insurance.

The usual level of general liability insurance for your IT Consulting or Programming business would be with a upper limit of $1 million for a single submission and a total of $2 million for the whole year.

See the table in the costing section below for average prices of general liability insurance for your IT Consulting or Programming insurance operations.

Professional liability insurance for your IT Consulting or Programming business

In the event where a client alleges some negligence, errors, or omissions in how you conducted your IT Consulting or Programming business for them, you can quickly have to fight a monetary claim.

Even if the matter against you is ruled in your favor, the cost of defense can be substantial, and the impact on your reputation can be damaging.

Every small IT Consulting or Programming business should have enough professional liability insurance to cover a once-off claim of $25,000, with annual cover of $50,000.

See the table in the cost of IT Consulting or Programming insurance section below for average prices of professional liability insurance for your IT Consulting or Programming operations.

Product liability insurance

Whatever goods you sell or advice you give about the goods, you are running a risk that buyers may claim that what they received didn’t meet your description of function, or that your recommendation was basically incorrect.

You need to know the particular laws of product liability in your own state.

For example, in California, all businesses in the supply chain can be held culpable for results caused by products claimed to be defective.

To cover yourself against any following lawsuit, you need Product liability insurance for IT Consulting or Programming

Only you can determine exactly how much insurance you should get.

Best advice is to consult with experienced insurance agents, brokers or company representatives for help.

Commercial insurance

Commercial vehicle insurance for your IT Consulting or Programming business

Take care! – most policies for private vehicle insurance do not cover any happening like theft or accidental damage when the van is being used for business purposes.

The right way to make sure that your vehicle is insured for both its own value, and the valuable contents, is by taking out a direct commercial vehicle insurance package.

Commercial truck policies insure the value of any vehicle in case of accident, malicious damage, fire, or theft.

Also, in case of any accident, the car itself, the content and any legal bills, medical expenses, and property damage is insured if your car is involved in a collision.

Most states, other than Virginia and New Hampshire, insist on this type of insurance.

The wanted value of the insurance depends on the depreciated value of the vehicle, and your requested level of cover of contents. 

Tools and Equipment insurance

Since your IT Consulting or Programming business needs specialized and expensive equipment, you can appreciate how much it can cost to replace it in case of any damage, loss, or theft.

The equipment may be subject to malicious damage, deliberate fire, theft, other such unexpected acts.

Also, acts of nature like lightning strikes, hurricanes, earthquakes, and other highly damaging natural events can eliminate your whole business in one stroke.

Unless you can afford to immediately replace such unique gear quickly out of your own pocket, you should have full-level equipment insurance so that you can immediately buy any equipment needed to keep your IT Consulting or Programming business running.

It is hard to advise how much equipment insurance you need – it’s basically dependent on how much you have invested in your IT Consulting or Programming business’ equipment.

Commercial Property insurance

Any IT Consulting or Programming business that owns or rents space in a building should have a commercial property insurance policy.

If you own the building, you certainly have a substantial capital investment, as well as a big liability if there’s a mortgage.

Any physical building location needs to carry insurance coverage for the value of the premises and contents against natural occurrences like fire and storms, and against criminal damages like theft and vandalism.

If your IT Consulting or Programming business operates in areas of high risk, like California or Georgia, additional coverage may be needed for earthquakes and hurricanes or tornadoes.

In other states like Illinois, where intense cold snaps can cause damage to outer coverings of IT Consulting or Programming business premises, there is a need for more extra cover than in warmer climes.

Because the level of cover depends mainly on the value of the property, it’s not possible to say what cover your need, but we have been able in the table in the cost of IT Consulting or Programming insurance section below to give some indication of the average prices per million dollars of property insurance for your IT Consulting or Programming business.

Temporary insurance by month, week or day for your IT Consulting or Programming business

Is your IT Consulting or Programming business working part-time or casually, or is the level of business seasonal?

Using short-term insurance makes perfect sense. Business insurance by the month, day, or week – temporary insurance for IT Consulting or Programming – are special policies where you can cover a designated period when you want to be covered.

By only paying for that period of cover, you will save by having reduced premiums but still having adequate risk cover.

The essential feature of short-term insurance is that you buy the cover for a defined period – a designated date, or a week or month starting on a specific date, for example for 30 days beginning on the specified date.

When you are expecting periods of better business activity, get the existing cover improved.

Talk to your insurance agent, broker or the company’s representatives to see what options you have.

Business Owners Policy BOP for your IT Consulting or Programming business

You have the option to combine a few of the important kinds of small business insurance in one policy that is known as the business owner’s policy – BOP.

A BOP combines commercial property and public liability insurance by amalgamating these coverages into one insurance policy, which can save you money.

BOP insurance will shield you if any claims of injury or property damage are made.

It is often the right choice for small and medium-sized IT Consulting or Programming businesses, such as yours.

There are two limits that will determine whether BOP is suitable for your own business.

BOPs will not cover your professional liability or commercial vehicle risks.

Also, the size of your business will determine whether you are eligible to take out BOP cover.

The usual business that is allowed to take a BOP policy must have no more than one hundred employees, and maximum five million dollars in annual sales.

In addition, you must separately take out the necessary worker’s compensation, health and disability insurance as determined for your state.

Workers Compensation insurance for your IT Consulting or Programming business employees

In most states, it is mandatory to have workers compensation insurance when your IT Consulting or Programming business has one or more employees.

Workers compensation insurance covers the business against any costs that arise if a worker experiences an injury or becomes sick as a result of work.

The benefits cover medical expenses, death benefits, lost wages, and vocational rehabilitation.

Failure to meet a state’s regulations in this regard can leave you as the employer required to pay penalties levied by the states.

Some states, such as North Dakota, Ohio, Washington, West Virginia, and Wyoming only allow coverage from the government-run monopoly state funds.

In these states, you may not obtain your workers compensation obligations from private insurance corporations.

Workers compensation charges are computed based on the employee’s pay, and usually come out at around $1.00 per $100 per month.

However, you must refer to the relevant authorities in your state.

Average costs of these types of insurance

Although every IT Consulting or Programming insurance requirement is unique, there are enough examples of usual quotes from insurance companies for us to give approximate guidelines, including what are the cheapest rates offered.

Of course, you should always check with an insurance representative what’s relevant for your business.

The list below is of annual premiums we have researched for the main types of insurance your IT Consulting or Programming businesses needs.

Cost of insurance for your IT Consulting or Programming operations depends on many different factors.

We have estimated these figures for small freelance IT Consulting or Programming businesses.

In larger states like New York, premiums are generally about 20%-30% higher than national averages, while in smaller states like New Mexico, they can be about 20%-30% lower.

The location and size and type of your IT Consulting or Programming business can have a big effect on the cost of different policies.

You should discuss with professional insurance agents and brokers, or insurance company representatives.

As well you can let the internet do the work for you by enquiring about insurance companies near where your business is located.

Another reliable source of information is the local Better Business Bureau in your city.

FAQ

What is small business insurance for IT Consulting or Programming operations?

This is an umbrella term used to describe standard insurance policies designed to protect IT Consulting or Programming business owners from risks like bodily injury, property damage, claims of negligence.

Does my IT Consulting or Programming business have to have insurance?

Some of the kinds of insurance are not mandatory for you to open your business, but they can protect you from risks in your business operations.

Certain other forms are required by state law, such as workers compensation and vehicle insurance.

What does a small IT Consulting or Programming business insurance policy cover?

Liability insurance provides protection against lawsuits or claims filed by a client for bodily injury, property damage, or negligence.

The exact cover will vary based on your own operations.

See the table in the costing section above for average prices of the recommended policies for IT Consulting or Programming insurance.

How much will IT Consulting or Programming business insurance cost?

On top of the size of the business, certain other factors, such as location and claims history, are used to determine your policy’s cost.

You should discuss with professional insurance agents and brokers, or insurance company representatives.

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