IT companies in Phoenix, Scottsdale, Mesa, and elsewhere in the Valley of the Sun can invest in small business insurance, which covers some of the devastating expenses that cause many businesses to file bankruptcy each year. Business in Phoenix can be
unpredictable. Phoenix was rapidly growing before the housing market crash. Now, it’s getting back on its feet. You may not be able to control the fluctuating economy, but you can mitigate your risks in other areas of uncertainty.
Support for Unexpected Costs in Phoenix: Small Business Insurance
There are many uncertainties in the business world, and small business insurance helps you avoid some of the most expensive ones: lawsuits, data breaches, identity theft, property loss, fires, personal injury lawsuits, and workplace accidents.
There's no one policy to cover all of these liabilities. Instead, web developers, IT consultants, and other tech businesses owners purchase a combination of policies to
cover their businesses. The most common policies include:
Third parties (non-employees) can sue a business for many things: property damage, slander and libel, copyright infringement, and bodily injuries. But the good news is that General Liability Insurance covers each of the lawsuits we just listed. For example,
if a client breaks their leg after tripping over loose cables during an in-home installation, the installer’s GL Insurance can cover the resulting lawsuit. Many contracts and office leases require General Liability Insurance.
Qualifying small businesses can get two important policies at a reduced price if they purchase them together through a Business Owner's Policy. BOPs combine General Liability Insurance (see above) and Commercial Property Insurance. With a BOP, a
business can insure its property the same way homeowners can ensure their houses. Property Insurance will pay to repair or replace property that is stolen, vandalized, lost in a fire, or damaged by covered weather events. In short, BOPs reward small-business
owners who purchase two policies together by giving them a lower price for the same coverage two policies provide.
Professional Liability Insurance (commonly called E&O Insurance) pays for lawsuits when clients allege you've made a mistake or were negligent in your work. E and O covers countless tech liabilities: client data breaches, software flaws, missed
deadlines, validation / verification issues, software testing errors, etc. If a client sues you over the quality or timeliness of your work, E&O Insurance will pay your lawyer's bills and other legal expenses. It’s important to realize
that E&O Insurance only covers third-party data breaches (breaches on client networks). If a breach happens on your own network, you'll need Cyber Liability Insurance (see below).
Phoenix-area tech businesses will have to purchase Workers' Compensation Insurance (also called Workers' Comp or Workman's Comp) as soon as they hire any employees. In fact, in Arizona you can be charged with a felony for not having this
coverage. Why is this coverage so important? Workers' Comp pays an employee's medical expenses
and their lost wages when they are injured at work (or develop a work-related illness). For example, if an employee develops carpal tunnel, Workman's Comp pays for their medical treatment, rehabilitation costs, and lost income. In addition,
most Workers' Comp policies come with Employer's Liability Insurance, which pays for an employer's legal expenses in a Workers' Comp lawsuit. If your business is a sole-proprietorship or other one-man operation, you aren't
required by Arizona law to carry this coverage. However, as soon as you hire an employee, you'll need to purchase a policy.
The first thing to know about Cyber Liability Insurance (also called “Cyber Risk Insurance” or “Data Breach Insurance”) is that it only covers certain data breaches, and only certain IT companies actually need it. Cyber Risk
Insurance covers first-party data breaches, which happen when data from your company's network is exposed. If you're hacked, Cyber Liability Insurance will pay for the response. It covers identity theft prevention, investigation costs, additional
personnel, and other expenses. The reason many IT businesses don't need Cyber Liability Insurance is that they don’t have a lot of financial or personal data on their own networks. Because E&O Insurance covers data breaches that happen
on client networks, these businesses don't need CL Insurance.
For free insurance quotes, talk with a TechInsurance agent at 1-800-668-7020 or submit an online insurance application.