How Much Liability Insurance Does My IT Business Need?

Canadian business owners face great risks. Something could go awry and your business could be sued by an angry client. That could lead to a lawsuit, lost wages, and a hefty settlement. Thankfully, there are ways to protect your company by using a technology company liability insurance policy. Before you can obtain liability insurance, you need to find out how much you need. This is one of the most important aspects of signing up for business liability insurance. So, how much will you need? ProfessionalsCoverage is here to help. Contact ProfessionalsCoverage because they can help you find a broker so you can obtain insurance sooner rather than later.


Types Of Tech Business Liability Insurance Needed

Business liability insurance is a loose term used to describe a handful of business insurance products. It covers a handful of products. For the sake of your business, you’ll want to obtain all of these insurance products because doing so will provide you with comprehensive protection. You need to combine commercial property insurance with business liability insurance. This combination will protect your business to the fullest so you cannot serve the Canadian public without having both.

  • Commercial property insurance will protect your business from damaged, stolen, or lost property.
  • Business liability insurance can help pay the legal costs when your company is sued.

You can find an array of liability insurance policies that will provide immense benefits to your tech business. Other policies are going to offer specific protection for your business, property, and employees. Before you can obtain a business liability insurance policy, you need to find out what is going to work best for your company. Furthermore, you will need to find out how much coverage is needed.

Once you’ve figured these things out, you can get in touch with a broker and sign up for insurance immediately. You’ll also want to work with ProfessionalsCoverage.


Aggregate Vs. Per-Occurrence Limit

With an insurance policy, you’re going to receive coverage up to a specific amount. That amount is referred to as your limit. The majority of insurance policies will come with two limits. It is pertinent to learn about these limits so you can know when you’re no longer going to be able to use your insurance policies. Your insurance policy will have an aggregate limit as well as a per occurrence limit. Both can limit the amount of benefits you’ll receive.

The aggregate limit determines how much you’ll be able to receive each year. This refers to the maximum amount the insurance company will pay throughout the policy period which is usually one year.

Your policy will also have a per occurrence limit. As the name suggests, the per occurrence limit is the amount the insurance company will pay for one claim.

When signing up for an insurance company, you may be able to alter the limits. By increasing the limits, you’ll be able to protect your company more thoroughly. Just remember that this will likely send your insurance premiums climbing higher. Still, it may be worth it for some Canadian business owners.


How Much Liability Insurance Should You Get?

You’ll likely need to obtain liability insurance due to a lease or contract. If this is the case, you’ll want to consult with the landlord or client since they’ll tell you how much insurance coverage is needed. Liability insurance is designed to protect someone else from financial risk and loss. Furthermore, it can protect your business by helping pay for the costs associated with a lawsuit filed against your business. When working with certain clients, there is a good chance that they’ll ask about your errors and omissions insurance policy.

If you don’t have this policy, they may not work with your business. With an E&O insurance policy, you’ll be able to help clients who have been harmed due to a professional error on your behalf. A mistake on your end could lead to a hefty lawsuit and settlement. To protect your clients and your business, you should have E&O insurance. Once you’ve obtained this insurance, you can rest assured knowing you’ll be able to help your clients when they suffer financial loss due to a mistake on your end.

In most cases, the client will demand that you have at least $1 million of E&O coverage. When renting a property for your company, you’ll likely need to obtain general liability insurance too. When renting an office space, you can guarantee that the landlord will request that you carry general liability insurance. This policy is very important because it can help deal with problems when someone is injured at your place of business. For instance, someone may visit your office, trip over a rug, and get seriously injured.

Business liability insurance can help. General liability insurance ensures that you’ll be able to defend your firm and help the injured customer. Furthermore, you should know that most landlords demand you have an aggregate limit of $2 million and a per occurrence limit of $1 million.


Common Liability Insurance Limits

When signing up for liability insurance, you are going to find yourself facing certain limits. You have to understand the risks you face so you can determine what your limits should be. If you fail to get enough E&O insurance or cyber liability insurance, your company is going to be in big trouble when a lawsuit is filed. Below, you’ll learn about the average coverage limits for the insurance policies commonly held by Canada’s tech companies.



Errors and omissions insurance is also called professional liability insurance. This insurance will cover the legal costs associated with lawsuits filed due to a mistake on your end. If your worker added a wrong number to the list and it costs the client money, E&O insurance will cover the costs of the lawsuit. This insurance will also protect your company when you’ve failed to complete the project before the deadline.

It is a good idea for Canadian tech companies to obtain an E&O insurance policy with a $1 million per occurrence limit. You’ll also want a $1 million aggregate limit.


Cyber Liability Insurance

Since you’re running a tech company, you’ll want cyber liability insurance. This is one of the most important policies for any tech company in Canada. This insurance will help you deal with the costs associated with a cyberattack. Furthermore, it can help you pay for lawsuits stemming from a data breach. A lot of your information is stored in an online database so you need a lot of cyber liability insurance. To cover the risks you face, it is pertinent to have at least a $1 million limit on your cyber liability policy.

Anything less would not be sufficient.


General Liability

You’re likely going to receive visits from your customers. When visiting your office, a lot can happen. A customer may try to carry a laptop up the stairs so they can see what you’ve been working on. One wrong step could lead to the customer falling down, breaking their laptop, and hurting themselves. You never know. With that being said, you should not let anyone visit your place of business until you’ve obtained general liability insurance. This insurance is essential for all Canadian businesses including tech companies.

It’ll also cover slander and libel lawsuits. Most tech companies in Canada will hold a general liability insurance policy with a $2 million aggregate limit and a $1 million per occurrence limit. It is a good idea for you to do the same.


Employment Practice Liability

To ensure that your business remains successful, you’ll likely have to hire new workers. This is great because you’ll get to meet new people. And, you’ll be helping these individuals by providing them with a job. The only downside is that you’ll have to turn some people away. When you refuse to hire someone, there is a risk that they’re going to complain about it. They may say that you discriminated against them due to their gender or race. This is why you’ll need employment practices liability insurance. It can help you deal with accusations of discrimination, harassment, and wrongful termination.

If your company is accused of violating an employee’s rights, EPLI will help. Tech businesses in Canada tend to have a $1 million occurrence limit on their employment practices liability insurance. This should be enough for your business too.


Should You Get Additional Liability Coverage?

When a lawsuit is filed against a company, there is a good chance that other companies are going to be involved too. Your business partners and workers may be sued as well. With this in mind, you have to consider the chain of liability when signing up for liability insurance. You have to think about the companies you work with. If they’re sued, you may get sued too because you worked with them. In one lawsuit, several companies were sued due to people receiving unwanted marketing emails and texts. Certain companies that were not involved were still sued.

So, there is always a chance that you’re going to ace a frivolous lawsuit. This can be expensive and disheartening. If it happens, you’ll want to make sure that you’ll be able to defend your company and live to serve another day. You’ll likely need to hire an attorney to defend your company in the courtroom. The plaintiff may drop your company from the lawsuit at some point but you never know. Even if this happens, you’ll likely still face thousands in legal costs.

You cannot work without having liability coverage. And, you need to make sure that you have enough. If you’re concerned that you don’t have enough, you should think about acquiring more. It will increase your costs but it’ll pay off dividends in the long run.


Getting Free Quotes

One of the best ways to learn more about the insurance products available to you is to obtain free quotes from multiple companies. Once you’ve done this, you’ll know more about the insurance plans you can buy. Furthermore, you’ll know how much you’re going to pay and what the limits will be. With this in mind, you should start by acquiring free quotes. They do not cost anything except for time. You can also work with ProfessionalsCoverage because they’ll help you find a good broker who will guide you through the sign-up process.






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