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IT Business Insurance for Boston, MA

Bolstered by risk-taking entrepreneurs and the brilliant minds of its colleges, Boston is pound-for-pound one of the top economies in the country – it even ranks the 12th largest economy in the world. What fuels this economy? From Cambridge to Quincy, the Boston metro area is home to almost 200,000 high-tech jobs, which have pushed Boston into the upper echelons of the world economy.

Beantown Business Basics: How Insurance Can Save Your Tech Business

Whether your business is a startup founded with engineers from Harvard and MIT or a South Boston cable and Internet installation company, your business faces risks each day that could put you out of business.

A single lawsuit can end up costing millions. Or a data breach could lead to a massive legal and financial headache. Fortunately, small-business owners can invest in business insurance, which covers these expenses and helps you focus on growing your business. Here are the insurance policies we most often recommend to tech businesses:

General Liability Insurance

General Liability Insurance is one of the most common (and necessary) insurance coverages for small business owners in Boston. It covers lawsuits from customers, clients, vendors, and other people you don't employ. When one of these parties sues you over property damage, slander, libel, copyright infringement, slip-an-fall injuries, or other common liabilities, GL coverage pays for the cost of the lawsuit. Say a client breaks his arm tripping over a cord at an IT consulting office. The consultant's General Liability Insurance pays for his legal fees and the cost of the settlement. Many business agreements, office leases, and other contracts require you to be covered by this policy.

Business Owner's Policy

More insurance, less money – that's exactly what a Business Owner's Policy can offer qualifying Boston-area small businesses. BOPs bundle General Liability (see above) and Property Insurance coverage into one policy for one lower premium. Property Insurance reimburses businesses when their commercial property (e.g., computers, furniture, owned office spaces, etc.) is damaged or lost due to theft, vandalism, some weather events, and fires.

Errors and Omissions Insurance / Professional Liability Insurance

E&O Insurance covers lawsuits about mistakes in your work. If Bill Buckner had this insurance, he would’ve been protected from lawsuits about the ball he let through his legs in the 1986 Red Sox World Series. But that's a baseball error; let's talk about IT errors, such as software flaws, missed milestones, latency issues, data loss, and data breaches on your client networks. E&O covers these liabilities and others having to do with shortfalls in your work. If a client alleges you've made an error or claims your work hasn't produced the desired result, this insurance protects you from the cost of a lawsuit, even if you haven't actually made a mistake.

Workers' Compensation Insurance

Workers' Compensation Insurance (also called “Workers' Comp” or “Workman's Comp”) covers medical expenses and lost wages when employees are injured on the job. Policies that include Employer’s Liability Insurance also cover Workers’ Comp lawsuits. Massachusetts laws mandates that all businesses must have Workers' Compensation Insurance, and you can face jail-time or fines if you don't. However, sole proprietors, LLC members, and partners don't have to cover themselves. So if you're the only employee or the only people working for you are partners in the company, you don't have to purchase this coverage.

Cyber Liability Insurance

Cyber Liability Insurance (also called “Cyber Risk Insurance” or “Data Breach Insurance”) covers the cost of fulfilling your legal obligations after a data breach occurs on your own network. Not all IT firms need this coverage. If you don't store private information on your network, there's no need to purchase Data Breach Insurance. However, if you keep a significant amount of financial data, personal info (SSNs, addresses, etc.), and other private data on your network, you should consider Cyber Risk Insurance. These polices pay for credit monitoring costs (to prevent identity theft), the cost of contacting customers whose data has been exposed, and other vital expenses after a breach.

For a free, detailed insurance quote for IT coverage, contact an insurance agent at 1-800-668-7020 or fill out an online insurance application.

Snapshot of IT Business Owners in Boston, Cambridge, and Quincy

  • 76% of Boston-, Cambridge-, and Quincy-based IT business owners work from home.
  • 25% are responsible for client data as part of their products and services.
  • The average business subcontracts 26% of its annual work to third parties.