How Errors & Omissions Insurance Can Help You Attract Bigger Clients
No matter the reason you started your technology business – whether you wanted to be your own boss or your side work simply took off – growth is always the endgame. When you land big clients, meeting that objective becomes much easier. These clients tend to keep you on for long-term work and are able and willing to pay the price you set.
Surprisingly, investing in Errors and Omissions Insurance for your technology business may be one way to attract those bigger clients because it demonstrates your business's viability and financial security.
Why Bigger Clients May Sidestep Small IT Businesses
A big company may be hesitant to contract with a new tech business. The problem isn’t your abilities. Most likely, the company is concerned about:
- Your size. The smaller you are, the riskier you appear to a client. In their mind, poor financial management plus a juicy job offer could be the end of your operations.
- The stakes. A bigger client probably has more to lose, and they have to decide if you’re worth the risk. If they hire you, they’re betting that you’ll not only finish the project, but that you will deliver it complete and on time. If you fail to do so, they take the hit.
To combat these doubts, you have to convince a big client that you are…
- In it for the long haul.
- Financially solvent.
- A serous business owner.
You can slowly build your portfolio and credibility to prove your worth to future clients, but if you need a leg up now, you may want to invest in E and O Insurance (i.e., Professional Liability Insurance).
Why Bigger Clients Want You to Have E&O Insurance
First, let’s be clear. No coverage can substitute for good work. But Errors & Omissions Insurance can help you overcome a client's preconceived notions that can keep you from getting a foot in the door. Here's how:
- Technology E&O Insurance makes your operation look legitimate. To get insurance in the first place, an insurer has to assess your risks and decide whether or not your business is a horse it wants to back, so to speak. So when you have insurance, your client knows an insurance company has looked at your operation and found it fit enough to cover. That makes clients more comfortable working with you.
- Errors and Omissions Insurance gives you client recourse if something goes wrong. They can make a claim if your work is subpar, incomplete, or inaccurate. When that happens, your E&O policy can help pay for your legal defense fees and settlements or judgments.
- Errors and Omissions Insurance proves you take your work seriously. Your willingness to invest in your business demonstrates a level of savvy and seriousness that may make clients more inclined to work with you.
Of course, if you really want to show you’re a savvy business owner, you might want to avoid E&O lawsuits altogether. Take a look at “5 Ways Technology Consultants Can Manage Their E & O Exposures” for more tips.
Here’s one more bonus tip: it’s smart to secure your technology Errors and Omissions coverage sooner rather than later. Big clients have plenty of contractors to choose from, so they have little reason to wait for you to shop for a policy. Apply for E&O Insurance now so you’re ready for your next opportunity.