As a Canadian software and hardware consultant, you should be familiar with your risk exposures. While your risk exposures are nothing compared to the software and hardware developers, they are risk exposures nonetheless. What are the most common risk exposures software and hardware consultants face on a daily basis? Disgruntled clients, unexpected expenses, nonpayments, low productivity, cash flow issues, employee health issues, negligence claims, and employee theft are just to name a few.
When it comes to software and hardware, they are constantly changing. As a consultant of these products, you must be on top of your game at all times. You must know when a specific software or hardware has been updated. Even if the update is only minimal, it is crucial to know what it entails.
Even a minor update can result in some big changes, which can impact your services greatly. Knowing this information up front will ensure you never make the wrong recommendation.
Computer Software And Hardware Consultant – Why Insurance Coverage Is So Important
According to analysts, the global software and hardware market is valued at nearly $36 billion. The same analysts are predicting the same value to increase significantly over the next decade. As a software and hardware consultant, you can expect your workload to increase as well.
Software and hardware consultants have many job duties, way too many to mention them all. To be a reputable consultant, you must know the ins and outs of the technologies you are promoting. A minor oversight could lead to a devastating end for you and your client, which is where insurance coverage comes into play. What type of insurance policy should computer software and hardware consultants carry?
First and foremost, you should obtain insurance coverage before starting your first hardware/software consultancy project. Experts recommend Professional Liability Insurance (PLI) to all the other options. PLI is an Errors & Omissions (E&O) insurance policy that protects hardware and software consultants from financial loss associated with third-party negligence claims and lawsuits.
If you know anything about negligence claims, you know they have the potential to be devastating for everyone involved. Negligence is the failure to take the proper steps to perform specific tasks properly. For example, a hardware and software consultant failed to gather much-needed information to determine a client’s technology needs. Without the correct data, the consultant created and implemented a technology solution that could not even come close to meeting the client’s technology needs.
The above scenario did not end on a positive note for the computer software consultant or the client. In fact, the failed technology strategy cost the client thousands of Canadian dollars, all of which was totally unnecessary. It was several months before the mistake was discovered. This was four months of utilizing ineffective hardware and software that did nothing for the client’s IT call center.
Once the mishap was discovered, the client immediately initiated a negligence claim process. After the negligence claim was filed, it was out of the consultant’s hands. Instead of complaining directly to the hardware/software consultant, the client decided to go through with a claim.
Negligence claims have many downsides for all parties. Unfortunately, the consultant is expected to take the hardest hit if the claim is determined to be legitimate. The client will take the brunt of the claim if it is determined to be frivolous.
Most Recommended Insurance Policy For Hardware And Software Consultants
ProfessionalsCoverage, a Canadian insurance expert, recommends PLI to hardware and software consultants and other technology professionals. This insurance policy was specifically designed to protect professionals, government entities, nonprofit organizations, and companies from financial loss related to third-party negligence claims.
PLI, also known as E&O Insurance (E&O) covers most damages caused by negligent acts of a professional or entity. Negligence has been shown to leave devastating marks in its path. Negligent acts are not intentional like tortious acts. While not intentional, negligence is a careless act with negative consequences.
Computer software and hardware negligence is any careless act that causes damage or bodily injury. Who do you think should pay for damage caused by a negligent act? Do you think it is the client’s responsibility? Or, is it the hardware and software consultant’s responsibility?
Everyone has an opinion when it comes to negligence. For example, the client refuses to accept the blame, pointing the finger at the computer hardware consultant. The computer software consultant, on the other, may also refuse to accept the responsibility. In this case, the only option left is to let the courts decide who is responsible for the negligent act.
Computer software and hardware consulting services have many responsibilities. In fact, the responsibilities are far too many to mention them all in the same article. With so many job duties, some hardware and software consultants find it difficult to keep up with their workloads. When consultants are overworked, the stress will eventually take its toll.
What Does PLI Cover
PLI coverage includes out of court settlements, monetary court judgments, bodily injury, property damage, and litigation expenses. If Canadian hardware and software consultants had to cover these expenses out of pocket, a few would be forced to sell their consultancy firms to access the funds. Fortunately, professional liability insurance coverage is a legal requirement in some Canadian cities, provinces, and territories. The consultancy firms operating in these areas would be one step ahead of their competitors because they were covered when the claims were filed.
When an insured computer software consultant is faced with a third-party claim or lawsuit, he/she has a backup plan. This plan involves getting the PLI insurer involved in the process. The insurer will immediately initiate an investigation into the client’s negligence to validate its legitimacy.
PLI – Why is a negligence claim investigation so important?
A PLI negligence claim investigation plays a major role in protecting consumers, professionals, and companies from fraud. Thousands of frivolous lawsuits and claims are filed against professionals and businesses in Canada annually. Thanks to thorough investigations by Canadian insurers, the culprits have been brought to the surface. Without these investigations, the real victims of the frivolous claims would have been forced to pay out millions to fraudsters.
Computer software and hardware consultants take negligence allegations very seriously. These professionals will go behind the call of duty to eliminate issues that could progress to a claim and even worse, a lawsuit.
The damage caused by third-party claims is not nearly as much as third-party lawsuits. In many cases, a third-party claim can be eliminated way before it has time to progress to a lawsuit. However, this only works when all parties have agreed to settle their differences out of court.
Claim investigations will determine who is at fault, whether it be the client or the consultant. If an investigation is conducted thoroughly and properly, the real culprit will be exposed before any money is paid out.
Computer Software And Hardware E&O Insurance Premiums
E&O premiums vary depending on the computer software consultant’s claim history, professional classification rating, and other factors. While it does not seem rightly fair to pay higher premiums than another computer software consultant for the same PLI policy. Unfortunately, this is how Canadian insurance works.
A history of legitimate negligence claims and a high-risk profession are two factors that have been shown to drive up PLI premiums. If you fall within one or more of these categories, your premiums will be slightly or significantly higher than an applicant in a low-risk profession with no claim history.
ProfessionalsCoverage Is Here To Help!
Canadian computer software and hardware consultants have a big decision to make when it comes to insurance coverage. Insurance is one of the most confusing topics among inexperienced professionals. But, do not fret, ProfessionalsCoverage is at your beck and call. No one knows professional liability insurance like these insurers.
When you contact ProfessionalsCoverage, you will immediately be paired with a highly qualified PLI agent. The same agent will work with you to customize an E&O policy that is guaranteed to meet or exceed your insurance needs.
Learn why professional liability insurance is a legal requirement in most Canadian cities by speaking to one of our agents. Combine professional liability with other insurance coverage types to ensure full protection against claims and lawsuits.
Professional liability insurance protects all professionals from financial loss associated with negligence claims and lawsuits. Negligent acts committed by Canadian computer software and hardware consultants have caused millions of dollars in damages over the past decade.
Do not become the next negligence claim victim, get covered today.
Computer Consultant Disability Insurance
You biggest asset in life is your earning ability. If you are unable to work, you will need to rely on either your savings or borrow money to sustain your lifestyle. When these unfortunate circumstances occur, dependents and spouses are also impacted financially and emotionally.
Disability insurance coverage will provide you a monthly income benefit, usually totaling 70% to 80% of your income, when you are unable to work for a period of time due to injury or illness.
Types of disability insurance
- Long-Term Disability Insurance (LTD)
- Short-Term Disability Insurance
- Key Person Disability Insurance
- Self Employed Disability Insurance
- Mortgage Disability Insurance
- Temporary Disability Insurance
- Supplemental Disability Insurance
Need coverage in effect? Compare the market!
FAQ before purchasing Computer Software and Hardware Consultants Liability Insurance
- How much consultant professional liability insurance do I need?
- How do I get a consultant insurance policy?
- What does consultants professional liability insurance cover?
- What is the difference between claims made & occurrence form of coverage?
- When will I need to be insured as a consultant?
- What other professions need this type of insurance?
Other useful posts you should also read
- Canadian insurance companies that provide professional liability insurance for consultants
- How does the claims process work if I get sued because of my consulting services?
- What is the cost of consultants liability insurance?
- How do I apply for a consultants professional liability insurance policy?
- How do I qualify for coverage as a consultant?
- What is the purpose of getting insured as a consultant?
- How long will it take to get an insurance quote for my consulting business?