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IT Business Insurance for San Jose, California

It's no secret that San Jose is at the heart and soul of the tech world and technology innovation. In fact, it produces more patents than any other city in the country. As the major city in the Silicon Valley area, San Jose is flush with talented engineers and imaginative entrepreneurs.

But even the most talented and imaginative small-business owners still need to protect their tech ventures with adequate small business insurance. Read on to learn more.

Small Business Insurance: Protecting the Capital of Silicon Valley

IT insurance can protect small businesses and startups from many common sources of bankruptcy. The financial stress of lawsuits, workplace injuries, property damage, and data breaches cause many businesses to close their doors for good. These expenses are unpredictable and can easily end up costing over $100,000.

The answer for many San Jose, Sunnyvale, and Santa Clara small businesses is to invest in small business insurance. Some of these policies are required by law or contracts – others just make a lot of sense. Here are the basic coverages an IT company might need:

General Liability Insurance

General Liability Insurance is often required by law or lease agreements. It covers third- party lawsuits (lawsuits filed against you by people not employed by your business) over damaged property, physical injuries, copyright infringement, slander, and libel. If a web developer in Sunnyvale is sued for using a copyrighted design, this coverage protects them. Likewise, if a telecommunications installation company in Mountain View is sued when they damage a client's building, GL Insurance can cover the cost of the claim.

Business Owner's Policy

Many IT professionals purchase a Business Owner's Policy (or BOP) because it offers lower rates. Because this policy is only available to small businesses with relatively low risk profiles, insurers can lower their premiums. A BOP is actually two policies bundled together: General Liability (see above) and Property Insurance. Commercial Property coverage insures any equipment, buildings, office space, computers, furniture, and supplies your business owns. If this commercial property is damaged or destroyed by a covered event, the insurance company will reimburse you for the loss. Most Property Insurance companies offer coverage for fires, theft, vandalism, and some weather events.

Errors and Omissions Insurance

Errors and Omissions Insurance (also called Professional Liability Insurance) pays for many tech-related lawsuits and disputes about your professional work. What does E&O Insurance cover? Software flaws, shoddy work, late deliveries, poor performance, bad recommendations, consulting errors, third-party data breaches (ones that happen on client computers), and other professional liabilities. The data breach coverage in E&O Insurance is crucial for tech businesses. If your software (whether you build, recommend, or just install it) causes a client to suffer a data breach on their computers, this coverage pays for the cost of your lawsuit.

Workers' Compensation Insurance

California requires IT companies to purchase Workers' Compensation Insurance (also called “Workers' Comp” or “Workman's Comp”). This coverage pays for an employee's medical expenses and lost income if they suffer a work injury (e.g., carpal tunnel syndrome or a fall down the stairs) or develop an occupational illness (e.g., exposure to chemicals or environmental toxins). Additionally, Workers' Comp policies often contain Employer's Liability Insurance, which pays the lawsuit in the event that an employee decides to sue in lieu of benefits. If you run a one-man operation or a sole-proprietorship, CA law doesn't require you to purchase this coverage. But businesses with employees will generally need this policy.

Cyber Liability Insurance

E&O Insurance covers data breaches on your client's network, while Cyber Liability Insurance covers breaches that happen on your network. For this reason, Cyber Liability Insurance (also called “Cyber Risk Insurance” or “Data Breach Insurance”) isn't necessary for most IT companies. Most IT companies simply don't store much private data on their devices. However, business intelligence companies, web hosting companies, and some other IT firms might need this policy. Cyber Risk Insurance pays for forensic investigations, extra personnel, the cost of contacting affected customers, and credit monitoring services for those affected by the breach. These resources help you fulfill your legal obligations (CA has some of the strictest data breach laws) and prevent identity theft. If you have any questions about which coverages you need or don't need, our IT insurance specialists will help you sort through the noise.

For more details about any of these policies (or for a free quote), call one of our insurance experts at 1-800-668-7020. Or submit an online insurance application and we'll email you a free quote, usually within minutes.

Snapshot of Small IT Businesses in San Jose, Sunnyvale, and Santa Clara

San Jose
  • 66% of businesses in San Jose, Sunnyvale and Santa Clara are run from homes.
  • 28% of business owners are responsible for client data as part of their products and services.
  • An average business makes $371,685 in annual revenue.