FAQ category: IT Contractors

You need cover because clients rely on their contractors more than ever, and the UK is becoming more litigious.

Increasingly, businesses are filling senior roles that come with high levels of responsibility, like heads of IT and information security with contractors and when things go wrong, it’s easier to point the finger at the external contractor than a company employee or director.

Our insurance products safeguard your business if things go wrong. It provides legal protection and also compensation to your clients if you are liable for negligence. If you operate as a limited company it will protect your balance sheet and if you’re a sole trader it’s even more important because you could be held personally responsible.

• Professional indemnity insurance – This is crucial. It covers you for allegations of mistakes and negligence. It provides compensation to your client (or a third-party) in circumstances where you are liable due to professional negligence, and usually covers associated defence or legal costs.
• Cyber insurance – This mustn’t be underestimated. Even the largest companies can be hacked. You know IT security better than most but it only takes a small oversight for your systems to be compromised. We provide specialist support and our insurance will get your business back on its feet quickly if the worst happens.
• Public and product liability – This covers physical injury and damage and can be added to packages at a low cost.
• Employers’ liability – This will protect you from legal costs should an employee sustain a bodily injury in the course of their employment. If you have any employees it is compulsory in the UK to have employers’ liability and it can be added to packages at a low cost.
• Computers, laptops and office equipment – We advise insuring your IT equipment from theft and destruction and can offer cover for portable IT on a worldwide basis

The most common claims we see against IT contractors are:

• Traditional negligence – When something goes wrong it’s easy to blame the external IT contractor, especially if it was a contractual requirement that they have insurance.
• Breach of contract – Allegations the website fails to meet the contractual provisions, including matters such as missed deadlines, non-compliance or non-performance.
• Counter claims and tactical litigation – Increasingly claims are being made tactically, for instance, by clients with cash flow challenges who make unfounded allegations in a bid to get your business to write off or reduce genuine invoices.

If you have American or Canadian clients or contracts, they will probably be excluded and some insurers will restrict cover to UK claims only. However, policies can be extended to include USA and Canada protection for an additional premium.

We cover any IT contractor or IT contracting business, including those working in higher-risk sectors like financial services, IT security or handling American clients.

Professional indemnity covers you for allegations of mistakes and negligence.

It provides compensation to your client (or a third-party) in circumstances where you are liable due to professional negligence, and usually covers associated defence or legal costs.

You’ll need a specialist technology product that covers you for things like allegations related to software failures, server downtime, project failings or breach of contract.

Beware of negligence-only policies, which will often exclude these key risks.