IT contractors and consultants are used to ebbs and flows in their businesses. You've had busy months and long-term contracts, but you also know what it's like to have downtime. That's part of the challenge of being an IT contractor.
But there's some good news on the horizon. According to a Mediabistro article, almost half of employers plan to add fulltime employees through the end of the year. Thirty-three percent of employers are also seeking to add temporary workers or contractors to their payroll. The largest area of increased employment? You guessed it: information technology.
With businesses expected to invest in more fulltime and contract IT work, now is a good time to review your IT risk management strategies. First, let's look at the areas of IT in which businesses are looking to invest.
Where Will Businesses Spend Their IT Dollars in 2014?
CareerBuilder surveyed around 2,000 hiring managers and found the areas of IT that were likely to see the biggest investment over the next six months. They are:
- Mobile development and technology.
- Cloud technology.
- Big data / business intelligence (for more information, see our Big Data Insurance page).
- Cyber security.
- Health informatics.
In many ways, this list shouldn't surprise anyone. Mobile and cloud tech, health IT, and big data have all been growing extremely rapidly, while businesses have become more and more concerned about cyber security.
What Are an IT Professional's Biggest Liabilities?
So if these are the hot areas of IT, what does that mean for IT risk management? IT professionals have four basic areas of professional liability:
- Third-party IT liability. As an IT consultant or contractor, you often install and recommend IT solutions that were coded by a third party. Sometimes you write your own code (we'll cover that risk next), but often you oversee the implementation of third-party software. As a consultant, you're liable for security flaws and performance problems with any software you recommend. For instance, you can be sued if you use a payment processing application that messes up your client's ecommerce orders.
- Developer risk. Whether you code mobile apps, apex code for Salesforce's SaaS, or any other platform, you can be sued for data breaches, data loss, latency problems, data security issues, and other shortfalls with your work.
- Contract disputes. You know that a whole host of issues can come up when you're working for a client. IT consultants sometimes deliver an IT solution only to have the client say it isn't what they wanted. Missed deadlines, verification / validation errors, and other problems can all lead to disputes and even lawsuits.
- Third-party cyber liability. If you contract with a client, you're liable for their customer / user data security. This risk is especially prominent among health IT professionals who can face million-dollar fines (see "$4.8 Million HIPAA Settlement Over Data Breach Is Largest to Date"), but every IT consultant is liable for data security. If a client's data is exposed because of a cyber attack or unintentional disclosure, you can be liable for not putting sufficient data protection in place.
How to Get Insurance to Cover New IT Contracts
If you're hired for a long-term IT project, many contracts will have a clause that requires you to have Technology Errors and Omissions Insurance.
Why do clients require you to have E&O Insurance? In the section above, we looked at four of the biggest IT liabilities. Do you know what they have in common? They can all be covered by an E&O policy.
Errors and Omissions coverage protects you from the costs of lawsuits over data liabilities, validation / verification mistakes, third-party software flaws, and other IT risks.
If you sign a new contract and need E&O coverage (or need to expand your current business insurance), submit an online insurance application. Our IT insurance agents can get you insured and supply you with the Certificate of Liability Insurance you need to sign a contract.