General Liability Insurance Basics for Technology Contractors
As a contractor or 1099 in IT, you’ve probably wished more than once that you could do a little more IT work and a little less fussing with contracts and clients and filing taxes. Trust us: we get it. One of the harsh realities about working for yourself is that you don’t get to do all tech work all the time – at least not at first.
As long as you’re operating a one-person (or even a few-person) show, the “business” side of things will take up a lot of your time. But your insurance needs, at least, should be easy to take care of.
Read on for a primer on the essentials of General Liability Insurance: what it is, how it works, and when technology professionals should consider getting it.
What Is Commercial General Liability Insurance?
Whether you call it CGL or just General Liability Insurance, this policy is the foundation of business insurance for most businesses. It offers protection for third-party lawsuits over…
- Bodily injury.
- Property damage.
- Advertising injury (e.g., accusations of libel or slander).
It also has a few other handy features. For example, if you have an office space and someone gets injured in it, your General Liability policy can pay for their immediate medical expenses (including an ambulance ride).
Commercial General Liability Insurance does NOT cover lawsuits over the quality of your work. For that, you’ll need an Errors & Omissions policy.
How Does General Liability Insurance Work?
For IT businesses, General Liability offers a key layer of protection. Any time one of the incidents mentioned above occurs and a lawsuit related to it is filed against your business, your policy can offer benefits in the form of payment for those lawsuit expenses. Specifically, General Liability benefits may be able to cover…
- Lawyers’ bills.
- Court costs.
- Settlement costs (if your attorney is able to come to an agreement outside of court).
- Judgment costs (if you’re found liable for wrongdoing).
When Should Technology Businesses Consider Investing in Commercial General Liability Insurance?
Well, we’re in the insurance business, so we’re risk-averse by nature. We always say that a business should invest in a General Liability policy as soon as it opens its doors. And we’ll stand by that claim.
Realistically, though, many IT consultants and contractors don’t think of themselves as a “business” when they’re first starting out. They may be “moonlighting” or “freelancing on the side.” They may not actually think about buying a Commercial General Liability policy until a client contract requests it.
So: if you’re reading this and you haven’t yet started your IT business, consider applying for General Liability Insurance now. That way you can schedule the start date for when you open your doors and be covered if and when a claim happens.
If you’ve been operating your business for a while, now is a great time to secure coverage. If a client hasn’t already requested that you have a policy in place, it’s only a matter of time before one will. And here’s an insider secret: announcing proactively (say, on your website) that you’re insured is one way to gain credibility as a business. This can be especially helpful when you’re trying to win over a larger (i.e., higher-paying) client.
Apply online today, and our agents may be able to have your policy in place as early as tomorrow.