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Success and failure are separated by the length of a human hair.  You can have all of the skills, all of the talent, and education in the world and but some things cannot be predicted or overcome.  In those moments business owners need help to keep their business upright and able to move forward.  This is when insurance matters, when business owners face unpredictable events that can prevent their business from operating. Commercial insurance policies are designed to help business when they need it the most. The cost of insurance is miniscule when compared to the complete loss of a business and its assets. 

If you operate an Information Technology company you will face risks such as data breach, liability claims and property damage.  Commercial insurance products such as general liability, professional liability, workers compensation, third- and first-party crime bonds, excess and property insurance and more can help mitigate the risks that face technology professionals. In this article Insure Your Company has created a guide that aims to help IT professionals understand the various insurance options available and help make informed decisions regarding their insurance coverage.

IT professionals have an array of insurance policies available to them to protect their business. Let’s review some basic insurance policies and how they can protect your company.

Insurance Policy Types

Professional Liability Insurance (Errors and Omissions Insurance) protects IT professionals against claims of negligence, errors, or omissions that result in financial loss to their clients. It covers legal defense costs and settlements. This is crucial because IT professionals handle sensitive data, and even a small error or oversight can lead to significant financial losses for their clients. It provides financial protection and reassures clients of your professionalism.

Cyber liability insurance covers costs associated with data breaches, including legal expenses, notification costs, and expenses related to restoring data or systems. It may also cover liability for damages to third parties due to a data breach. In the digital age, data security is paramount. IT professionals often manage critical data, and a breach can have severe consequences. This insurance helps IT professionals recover from cyberattacks and protect their clients’ sensitive information.

General liability insurance covers bodily injury, property damage, and personal injury claims. It can also cover legal defense costs in case of a lawsuit. IT professionals may not have as much physical exposure, they still interact with clients and vendors. Accidents or property damage can happen in various settings, and this insurance provides essential protection.

Business Owner’s Policy A BOP typically combines general liability and property insurance. It covers physical assets like office equipment, computers, and buildings.  IT professionals often have valuable equipment and assets that need protection. BOP can provide coverage for these assets and help in the event of unexpected incidents, like fire or theft.

Workers’ compensation insurance covers medical expenses and lost wages for employees who are injured on the job. If your agency employs IT professionals, this insurance is crucial. Even in an office setting, accidents or injuries can occur, and this coverage ensures that employees receive proper medical care and wage replacement.

Commercial Auto Insurance (if applicable) covers vehicles used for business purposes, including accidents and liability. If your agency uses company vehicles or employees drive for work purposes, this insurance is necessary to cover accidents and potential liability.

Understanding the different insurance policies and why they are essential will enhance your ability to make decisions about the insurance your business needs. It’s crucial to tailor insurance solutions to the specific needs and risks of your business and the ever-evolving field of information technology.

10 Key Insurance Terms

Now that we understand different insurance policy types let’s review 10 key insurance terms that you will see within insurance policies.  They are used to define how the policy will help your business in the event of an accident or unforeseen event.

Premium: The premium is the amount an insured person or business pays to an insurance company in exchange for coverage. It is usually paid on a regular basis, such as monthly or annually.

Deductible: A deductible is the initial out-of-pocket amount that the policyholder must pay before the insurance company starts covering the remaining costs. Deductibles can vary depending on the policy.

Policy Limits: Policy limits refer to the maximum amount an insurance policy will pay out for a covered loss or claim. These limits can apply to different aspects of a policy, such as liability or property coverage.

Coverage: Coverage is the extent of protection provided by an insurance policy. It defines what is included or excluded from the policy and what specific risks are insured against.

Underwriting: Underwriting is the process by which an insurance company evaluates and assesses the risk associated with insuring a particular individual or business. It helps determine the premium and coverage terms.

Claim: A claim is a formal request made by the policyholder to the insurance company to provide compensation for a covered loss, damage, or event.

Endorsement (Rider): An endorsement, also known as a rider, is a modification to an existing insurance policy that adds, removes, or changes coverage terms to suit the policyholder’s specific needs.

Exclusion: Exclusions are specific situations or circumstances that are not covered by an insurance policy. It’s essential to understand what is excluded from your policy.

Policyholder: The policyholder is the individual or entity that owns and holds an insurance policy. They are typically the one responsible for paying premiums and making claims.

Beneficiary: A beneficiary is the person or entity designated to receive the insurance proceeds in the event of the policyholder’s death or a covered event. This is common in life insurance policies.

With basic knowledge about common insurance policies business owners and IT professional can make informed decisions when choosing the right protection for their companies.  It is always important to consult an insurance professional with any questions or concerns about insurance. 

Please come back for PART 2 where we will review: Assessing your Insurance Needs, Choosing the Right Insurance Policies, Cost and Premiums, Claims and more.

This article is for general information purposes only. The information contained on this page should not be construed as specific legal, HR, financial, or insurance advice and is not a guarantee of coverage. In the event of a loss or claim, coverage determinations will be subject to the policy language, and any potential claim payment will be determined by the insurance carrier.  We shall not be liable for any damages in connection with the use of any information provided on this page. Please consult with your insurance agent/broker or insurance company to determine specific coverage needs as this information is intended to be educational in nature. provides Technology Business Insurance solutions to protect your company from potential risks and liabilities. Our policies are tailored to meet the unique needs of your technology-based business. Request a free quote today.