What insurance coverages should IT businesses look for?
IT businesses usually need both property and liability coverages. Some potentially important ones are:
- Commercial Property Coverage: Might cover company-owned buildings, equipment and inventory against damage or loss.
- General Liability Coverage: Might cover commonplace accidents, defamation lawsuits, and cases of false advertising.
- Technology Errors and Omissions Coverage: Might cover mistakes made by employees when providing clients with services.
- Cyber Liability Coverage: Might cover data breaches and malicious online attacks that compromise the business’s or customers’ information.
- Commercial Auto Coverage: Might cover business-owned cars or vans, and is usually required if commercial vehicles are used for providing on-site services.
In addition to these, businesses may also want coverages such as employment practices liability insurance, commercial umbrella insurance and others. A knowledgeable insurance agent can go over these and any other available coverage options.
Should IT businesses get business income coverage in their policies?
Business income coverage can provide important financial protection if there’s a covered event that results in prolonged lost revenues. The coverage may provide regular payments for a period when the business is recovering from an event.
Most IT businesses should strongly consider getting the coverage, as businesses in this sector have substantial exposure to this risk. Not only could an event that impacts an IT business itself force operations to halt, but so too could an event that impacts one of the vendors that the business uses. For example, an IT business might not be able to operate if its contracted cloud storage provider has to shut down because of a covered incident.
Business income coverage may help protect against these scenarios. While many business income coverage terms limit coverage to only events directly affecting the policyholder (i.e. the IT business), a few might extend coverage to events impacting vendors.
An insurance agent who knows IT business insurance well should be able to assist with finding business income coverage that offers extensive protection. They can check whether a specific policy’s coverage applies only to the IT business, or also to its vendors.