What Types of Insurance Do I Need For My IT Business?

Understanding Small Canadian Business Insurance

As a Canadian business owner, you likely don’t need anyone telling you that business insurance can be more than confusing. You already know that certain policies are required by law while other policies can protect you against specific risks. Risks that could eventually lead to the closing of your business or financial ruin of your family. Whatever the situation, you already know that business insurance is important, otherwise, you wouldn’t be here. The only problem is that there are so many different policies available. Some policies might benefit your tech business while others cover liabilities specific to your business with employees, offices, and other risks. The key to insurance is knowing what policies you need and how they can protect you in specific situations.

 

Pertinent Business Insurance Policies For Today’s Tech Companies

The Canadian technology industry is a truly unique one. Unique in the fact that a lot of businesses will share the same risks. It doesn’t matter if you are a large tech firm with 500 employees or a small at-home tech business with one or two employees, you’ll both likely face a number of similar risks. There are a few key information technology insurance policies that can protect you from the common liabilities faced by almost every Canadian tech business in existence today. Once again, protecting your business to the fullest is knowing what these policies are and just how they can protect you, your business, your employees, and your family.

 

Errors And Omissions Insurance Policies

The first up on the list is errors and omissions insurance, also sometimes referred to as professional liability insurance. This one is a policy that will cover you and your employees against lawsuits pertaining to oversight or negligence. Whether the claims are founded or not, this policy will step in and cover any of the court-related costs with the incident. It’ll pay to hire you a lawyer, it covers the fees your lawyer charges, it covers court costs, and it might even cover some or all of the settlement if you are deemed guilty.

There are a lot of times that some clients will ask for proof of E&O insurance before they agree to work with you. This is because this policy not only shows that you are serious about your work, but it shows that you are able to compensate your clients in the event that a major mistake is made.

 

Cyber Liability Insurance Policies

It goes without saying that you know and understand all the potential cyber risks out there. However, you might not know how it can affect your business. It is something that will not only negatively impact your business financially, but it’ll undermine your competence with your clients. Clients may no longer trust that you are capable of safeguarding their business.

Cyber liability insurance will help pay for client notifications as well as recovery costs after such a breach or cyber attack at your company. In addition to this, it’ll cover legal costs in the event that the client wants to take the case to court. Unfortunately, they often do. This policy can be bundled with errors and omissions insurance to help reduce your overall costs.

 

Pertinent Policies For The Tech Company With Employees

It might be entirely possible to open and run a tech business on your own. However, if you want to maximize your profits and work more efficiently, you’ll need to take on employees. There is nothing wrong with this, but it does mean that you’ll be exposed to more risks. This is why any tech business with employees will need specific policies in place to safeguard against these risks. Not only this, but tech businesses with employees might be required by Canadian law to have certain policies in place. Once again, it is key to understand these policies and exactly when, where, and how they can protect your business.

 

Workers’ Compensation Insurance Policies

Since this one is required by Canadian law, it’ll be best to start with it. For every employee you have, you will need workers’ compensation insurance. This type of policy covers your employees when they are injured on the job. It’ll cover their medical expenses, lost wages, rehab costs, and any court-related costs in the event that the employee wants to sue over the incident. Sometimes lawsuits will form because employees don’t feel like they are getting adequate compensation from such policies.

This is because specific policies will only offer so much coverage and protection. For instance, these policies will likely not cover the entirety of the lost wages while an employee is out injured. They’ll only cover a portion, which some employees might not feel like is enough, especially if they are injured to the point where they are going to be out of work for long periods.

 

Fidelity Bonds Policies

There are some situations where a client or company might require you to initiate a fidelity bond before hiring your tech company. This will be especially true when you are working with companies that handle and process important, secretive information. Why? Because this information could be worth millions in the hands of competitors. Given this, employees could be more than tempted to steal such information and pawn it off to the highest bidder.

Regardless, this is where fidelity bonds help out. They’ll cover the costs related to employee thefts of information or breaches.

 

Employment Practices Liability Insurance Policies

Not only are you at risk of current employees filing lawsuits, but you are at risk of previous employees filing lawsuits against your company. That’s right, a fired or wrong employee could claim that you discriminated against them or wrong them. Regardless of the claims or founded or not, these are situations that could end up in the court of law. That’s exactly where employment practices liability insurance policies help out. They’ll cover the cost of discrimination, harassment, and wrongful termination lawsuits.

 

Coverage For Tech Businesses With Commercial Offices

As a tech business owner, it is likely that you’ll mostly be working off-site. You’ll likely be working on the customer’s property, setting up and monitoring networking or software. Despite this, there are still a lot of tech firms that like to open and maintain a physical brick and mortar shop. This is because it not only gives them a safe place to meet with clients, but it comes in handy for advertising and establishing their brand. Regardless of the situation, it does open one up to specific risks as well.

 

General Liability Insurance Policies

Some of those risks are customer injuries and property damage. A customer or his or her property could easily be injured while on your property. In these situations, they are going to look at you and your company for compensation. That’s what these policies protect against. They’ll pay for the medical and repair expenses associated with the case as well as the court-related costs if the client wants to sue.

If you rent, the landlord might require you to get this policy. To help save money on policies like this, you can combine general liability insurance with commercial property insurance. This will only save you money, but it’ll extend your protection to the fullest.

 

Commercial Property Insurance Policies

Commercial property insurance policies are ones that extend more to you than the customer. These policies will cover you and your property in the event of unexpected events like extreme weather, fire, vandalism, or theft. Once again, there are some landlords that might require you to take out policies like this before renting the space to you.

There are even certain providers like ProfessionalsCoverage that will include business interruptions insurance with these policies. Business interruptions is a policy that’ll come in more than handy if there is a fire, extreme weather, or vandalism. This is because it’ll cover the lost wages for the time that your shop is shut down. There are even some situations where such policies might pay to have your business relocated to another store if you are going to be shut down for extended periods. Whatever the situation, you can see exactly when and where these situations can help.

 

 

 

 

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Helpful resources for IT professionals and their companies

 

Other types of IT Businesses we insure:

If your specializing is not mentioned below, have no worries. Our insurance markets can provide liability coverage for the majority of information technology related businesses.

 

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