IT business owners know that details make a world of difference in their line of work. After all, any errors in IT work for a client could be the difference between a repeat contract and your client suing your business in an Errors & Omissions lawsuit. That's why many IT professionals turn to a business insurance plan to safeguard their business and their completed work. However, in the search for adequate coverage, you'll quickly find that misinformation abounds, especially online. Without factual information, even the most careful IT professionals may inadvertently expose their business to risks.
Without adequate coverage, one professional negligence lawsuit or claim that your business failed to provide a safe work environment can be enough to bankrupt a small IT firm. If your business is charged with wrongdoing, your business assets and even personal assets can be collected to pay the settlement.
Don't leave your computer, web, or IT business vulnerable. Read on to learn the facts about business insurance and how you can protect your company from unexpected disasters.
Computer, Web, and IT Business Insurance Myths Busted
As an IT professional, you know that the Internet is a valuable research tool, but its convenience comes with inherent drawbacks. With the abundance of business insurance information available, you can quickly run into inconsistent and conflicting information about what your business may require and what kind of protection your coverage may actually offer.
To set the record straight and make sure your business protection plan is built on accurate information, take a look at these six pervasive business insurance myths.
Business Insurance Myth #1: "I can always close my business if I'm sued. You can't collect on what doesn't exist!"
This is perhaps the most commonly held belief when it comes to how the litigation process works. However, closing your business will not protect you from a costly court settlement if you are sued and found liable. Most courts do not take into consideration whether your business is still in operation when they reach a decision. And you don't need great wealth or business assets in order to be collectible in the eyes of the court. You could be required to cover settlements or judgments with your personal assets if your business assets are not enough. Because of the costly nature of liability suits, it's important to know that it doesn't take deep pockets or million-dollar business assets to require business protection planning.
Business Insurance Myth #2: "I have decades of experience and my clients trust me. The likelihood of my business being sued is minimal at best."
Simply because your business has not yet been sued doesn't mean it never will be sued. Remember, it only takes one lawsuit alleging professional negligence to potentially bankrupt your IT business. An Errors & Omissions-related lawsuit against your business may not even be based on the quality of your work — you could have been named in the suit just because you were part of a larger project. If a client sues your business for professional negligence and you don't have adequate coverage — or any at all — the court expenses, settlements, and attorney's fees will have to be covered out of pocket. Most small businesses cannot spare that kind of money and still continue to operate. That's why, regardless of your experience or record of client satisfaction, your IT business benefits from the financial protection Errors & Omissions Insurance offers.
Business Insurance Myth #3: "My IT business is too small to need its own insurance policy."
Whether you run a successful IT services firm or you are a one-person operation, business insurance coverage protects your business from liability, disasters, and unpreventable risks. And thanks to the current market, plenty of business insurance policies are very affordable for even the smallest business. Without adequate coverage, you could jeopardize not only your business, but also your personal assets if you are sued. You may also consider that a tornado or fire does not discriminate between large and small businesses, and such disasters can destroy valuable equipment, supplies, and inventory you need to run your business. Without Property Insurance, would you have the necessary funds to replace your equipment, repair your shop, and open your doors again?
Business insurance is designed to ensure your business can withstand an unexpected financial setback and still continue to function. And given the prevalence of small startups and contractors today, many business insurance policies can be tailored just for your business needs — no extras, no hidden fees. Talk to an insureon agent to learn more about your small-business insurance options.
Business Insurance Myth #4: "I have an Errors & Omissions Insurance policy, so I'm completely covered."
Though it's wise to invest in a reliable Errors & Omissions (E & O) policy, know that a single policy will not "fully cover" your IT business. For example, your E & O policy will not cover your business for claims concerning a third party's injury on your business premises. Only a General Liability policy will offer that protection. And neither of these policies cover work-related injuries your employees experience or the lawsuits they may file against your firm. For such claims, you would need a Workers' Compensation policy. But as with all policies, exclusions vary from carrier to carrier. That means your best course of action to ensure your business has the coverage it needs is to work with an insurance provider you trust and to know your policy. Make note of your policy's exclusions, and if you have questions, contact an insureon agent — we're happy to help.
Business Insurance Myth #5: "Business insurance doesn't fully cover you anyhow, so there's no point in making the investment."
Business insurance is not a matter of all or nothing. Consider that a policy that only offers minimal coverage is still better than receiving no compensation in the event of an expensive claim. If your IT business is sued, business insurance tends to be a small price to pay for the millions it could offer in coverage. And when you work with trusted insurance agents — such as the insurance experts at insureon — you can tailor your policy so that your business has the coverage you are looking for. Depending on your policy, you can enjoy a wide scope of coverage, especially if your business is eligible for a Business Owner's Policy, which bundles General Liability and Property Insurance into one convenient plan.
Business Insurance Myth #6: "My employees aren't exposed to many risks. I probably don't need Workers' Compensation coverage."
There are always risks that come with performing work, no matter how low-risk your office setting may seem. For instance, if your employees sit in front of their computers all day, they could develop lower back strain, eyestrain, and carpal tunnel syndrome. Your employees could potentially sue your business for their work-related injuries, claiming you failed to provide a safe work environment. Also, regardless of how safe your workplace is, your state may still require you carry Workers' Compensation coverage if you have W2 employees. This coverage offers funding for legal fees to defend your business in court if an employee sues for work-related injuries. Workers' Comp also covers the cost of immediate medical attention and your employee's foregone income while they were recovering.
Protect Your IT Business
Protect Your IT Business
The insurance experts at insureon can help you determine the types and amount of coverage that can safeguard your business against uncertainty. When you're ready to protect your IT business, complete our simple online application. Typically, you can receive quotes from multiple A-rated insurance providers in minutes!