IT Business Insurance for System Network Design Professionals

As a network and systems design business, you know the ins and outs of computer networking. From small businesses to large corporations, your company wires and installs cabling for data and voice jacks, routers, and switch and wireless antenna. With the help of your company, businesses enjoy their own networks where they can easily share information and connect to the Internet. When something goes wrong, they call you to troubleshoot their network.

Planning, implementing, verifying, and troubleshooting wide-area enterprises is no small task. The many moving pieces involved in each of your projects opens your business up to potential mistakes, oversights, or accidents. If something goes wrong in your work, it could mean more than a downed network for your clients—it could mean a costly liability suit for your system network design business.

IT business insurance offers a solution when these risks threaten the health of your company. Keep reading to learn…

  • How key IT insurance policies protect your business.
  • Which resources to use when building a business protection plan.
  • How to reduce potential claims and lawsuits through risk management.
  • What insurance claims look like in a business like yours.

Key IT Insurance Coverages for System Network Design Businesses

As businesses grow, their networks demand an increasing number of LANs. Corporations may require internal connectivity between offices in different locations, which requires a skilled system network designer who knows how to properly configure a WAN. From standardizing physical hardware (routers, switches, and fiber-optic cables) to configuring the most user-friendly network infrastructure, your company can iron out all the details needed to create a high-speed, reliable network.

But when something goes wrong (for instance, redundancy measures are not taken, resulting in a failed network when a problem occurs), you could face a costly lawsuit. If you don't have the resources to meet a client's demands for compensation, they may take you to court over the issue—and settlements have a reputation for leveling even the best-run IT businesses. The following coverages can help your businesses survive such unexpected hits:

  • General Liability Insurance GLI. Commercial General Liability is one of the primary policies in any business protection plan. GLI offers coverage for an array of third-party liability suits, including allegations of bodily injuries that result in physical damage and loss, property damage, advertising injury, and personal injury (libel or slander). When someone sues your business for these claims and you have a GLI policy, your insurer covers the costs of attorney's fees, settlements, and other court costs, up to your limits. Find out how much General Liability Insurance costs by applying online for a quote from TechInsurance today.
  • Commercial Property Insurance. Commercial Property Insurance acts as a safety net if your office, equipment, supplies, and inventory are damaged or lost due to a fire, tornado, theft, act of vandalism, or power outage. You can insure your commercial assets at their replacement or current cash value. The difference is that insuring items at their replacement value comes with a higher premium, but also a larger payout. That way, you have the funds you need to buy new gear after a covered event damages your property. If you live in an area prone to earthquakes, flooding, and hurricanes, you should consider adding a weather-specific endorsement to your Property policy to cover these damages.
  • Business Owner's Policy (BOP). A Business Owner's Policy offers your network design business Property, Business Interruption, and General Liability Insurance for less. If your business is considered low-risk and meets certain other criteria, you receive these three foundational commercial policies for a discounted annual premium.
  • Cyber Liability Insurance. Also referred to as "Cyber Risk Insurance" and "Data Breach Insurance," Cyber Liability protects your business from the data losses and damage associated with computer viruses and cyber attacks. If a client accuses your IT company of causing or failing to prevent a breach of data hosted on the network you designed, the court may hold you responsible for their losses. When that happens, the policy can pay for litigation, notification of those affected, credit monitoring services, and PR efforts to repair customer relationships. First-party Cyber Risk Insurance protects your business when hacker breaks into your company's systems and steals credit card numbers from your clients. Third-party Cyber Liability protects your company when you build the infrastructure that allows such attacks to happen to another party.
  • Workers' Compensation Insurance. If your network design business employs consultants and contractors, your state likely requires you to cover them with a Workers' Compensation Insurance policy, but the laws vary based on where you live. Workers' Comp not only compensates your employees for medical expenses and missed income when they are injured on the job, it also protects your business if an employee sues you for the negligence that contributed to their injuries. The Employer's Liability portion of your Workers' Comp plan covers your litigation costs.
  • Errors and Omissions Insurance. For IT businesses, the importance of carrying adequate Errors & Omissions coverage cannot be stressed enough. Also known as "Professional Liability Insurance" and "E&O Insurance," this policy covers claims that arise from errors or mistakes you made in your work, breached warranties, incomplete service, and professional negligence. When your business is entangled in a costly E&O claim, your insurance covers the cost of attorney's fees, settlements, and other costs, up to the limits of your policy. E&O policies are claims-made based, which means your policy must be active both at the time of the incident as well as at the time the claim is filed.

Scroll to the bottom of this page for examples of what each of these insurance claims may look like.

Business Protection Resources for System Network Designers

Wondering how much business insurance costs? Not sure what a Certificate of Liability Insurance looks like? Curious about what exactly "force majeure" means? Business insurance can be a tricky foray for the uninitiated. That's why we have these handy references ready to help answer your questions in a snap:

  • Sample IT Business Insurance Quote. Start your business protection plan with concrete numbers as a point of reference. This sample quote looks at an individual or small business with up to $150,000 annual revenue that provides programming or web design services. Your own premium may look very different, as it ultimately depends on your actual revenue, your state, the number of employees you have, and the services you offer.
  • Example Certificate of Liability (Proof of Insurance). If you work with a client who demands proof of insurance in order to work with their company, this is an example of the Certificate of Liability document you would show them.
  • Sample Non-Disclosure Agreement. Anytime you share proprietary information with a business associate, a Mutual Non-Disclosure Agreement can help protect your company. Reference this free NDA template when creating a contract for your business needs.
  • IT Business Insurance Cost Estimates. One of the first concerns small IT business owners have when shopping for insurance is the cost. Though we recommend prioritizing the amount of coverage over the cost, it's good to know you can protect your business without breaking the bank. Take a look at these ballpark estimates of business insurance for IT firms so you can start planning.
  • Business Insurance Glossary. Though the insurance industry may seem as though it's teeming with legal terms, you only need to know the basics to protect your business. If you run across a term you're unfamiliar with, check out our glossary.
  • Insurance FAQ. On our FAQ page, we've provided answers to some of the most common business insurance questions. Check out it to see if your question has already been answered. If you don't find what you're looking for, be sure to chat with one of our IT business insurance agents.

5 Risk Management Tips for System Network Design Businesses

Creating a reliable fiber optic network for your clients comes with plenty of risks. But there are some steps you can implement to help reduce client problems and the potential for liability claims. Here are five key ways to manage risks in your daily operations and possibly reduce your insurance premiums:

  • Keep your clients in the loop. Chances are your clients will have a limited amount of IT knowledge. Even if they have an IT staff, they may not know the intricacies of building a system network from scratch. So keep your clients filled in about what the project entails, but do so in terms they'll understand. Many E&O claims arise from communication breakdowns and misunderstandings, so it's best to head off these risks from the start. Also, make sure that important project details such as the initial agreement, project scope, and project timeline are in writing and that your clients receives a copy. Any changes that come up down the road should also be documented and agreed to in writing. That way, if a lawsuit does arise after you complete your work, you'll have proof that you did the work you said you would do.
  • Ensure you design a network that coheres with your client's IT knowledge. Sure, the bells and whistles that accompany switches and routers can offer a network plenty of possibilities. However, it may be difficult for your client's IT staff to handle and maintain, especially if they are unfamiliar with the features you implement. To reduce dissatisfaction, be sure to design a network that fits the needs of your clients and is still user-friendly.
  • Create redundancy in the network design to reduce E&O claims. More and more businesses rely on their networks in order to function, which means any downtime in their connectivity could lead to serious losses. That's why savvy system network designers build redundancy into their LANs. For example, you may utilize dual fiber-optic uplinks from wiring closets to core switches. You'll also want to configure a gateway redundancy layer. Without gateway redundancy built into your system, a failure could result in your client's network dropping off completely. It's these total outages that can lead to losses and lawsuits.
  • Plan for the worst-case scenario. In addition to your commercial insurance policies, you'll also need to have a strategy for handling the aftermath once disaster strikes. For example, say a fire destroys your office space and computers. Your important records, contracts, contact information, documents, proof of insurance should be backed up somewhere safe—in the cloud, duplicate copies you keep at home, etc. You may also want to have a relocation venue picked out so your business can operate elsewhere while your previous building undergoes construction.
  • Overshoot your E&O coverage. E&O claims can be especially devastating for IT companies since the laws surrounding the industry have a lot of catching up to do. Without precedent cases for the court to base their decisions, the fate of your business may boil down to how well the judge and jury understand what your business does. Thankfully, your E&O Insurance can protect you when a client alleges you failed to do your job properly and the court rules in their favor, even when you didn't actually make a mistake. Check out our article "Why E&O Insurance Is More Important for Tech Firms than Others" for more details about the necessity of adequate E&O coverage.

System Network Designers: Example IT Insurance Claims

It's easy to shrug off stories you read about businesses going under after facing a lawsuit or extensive property loss. And it's easy to think, "It won't happen to me!" But the truth is that liability risks and property damage can happen to even the best-run IT businesses. Here are some sample scenarios that exemplify how your system network design business benefits from adequate insurance coverage:

General Liability Claims

  • Bodily injuries. A visitor breaks a leg on your office's just-waxed floors. They sue your business for medical expenses, and the court orders your company to pay $20,000. Your General Liability covers the litigation and settlement costs.
  • Physical property damage. While surveying your client's site to get an idea about the best configuration and layout for the network's hardware, you accidentally knock over a decorative vase in your client's lobby. They sue for the cost of a replacing the piece of modern art ($15,000—a collector's item, as it turns out), which your GLI covers.
  • Advertising injury. Your website copy was lifted word for word from your competitor's site. They sue your company for copying their advertising, but settle out of court with your insurer for $4,000—which your GLI pays for.
  • Personal injury. You take to Twitter to vent about a particularly impossible client. Unfortunately, they see the libelous tweet and allege it hurt their reputation. When they sue, GLI covers your attorney's fees and the cost of settling out of court.

Property Claims

  • Property damage. A thief steals thousands of dollars worth of computers, media devices, and computer equipment, and leaves you with a ransacked office to pick up. Your Commercial Property Insurance compensates your business for the replacement value of your gear.
  • Business interruption. A burglary damages your building so badly that you're unable to open your doors for a week. Your Business Interruption Insurance reimburses you for the lost income you would have earned during this time.

Cyber Liability Claims

  • First-party liability. You accidentally open a link infected with malware, and a virus spreads to your email contacts. First-party Cyber Liability covers the cost of informing affected contacts, purging your system, and repairing your relationships with your clients.
  • Third-party liability. A network you designed for a client is hacked, and their customers are reporting stolen credit cards. Your client sues you, contending your network should have prevented the cyber attack. They seek $200,000 in damages for the network shutdown and the lost or corrupted data. Your third-party Cyber Liability Insurance covers the claim, including the cost of defending your business, settlements, and other fines related to the charge.

Workers' Compensation Claims

  • Medical expenses and foregone wages. The wiring closet in your client's back room is a mess. As your employee tries to sort it out, he trips over the cables and sustains a nasty head injury. The trip to the hospital, treatments, and a few days of missed income total $11,000 in loss, all of which your Workers' Comp covers.
  • Litigation costs. Your employee decides that your business is to blame for his head trauma. When he sues your business for failing to provide a safe work environment, your and the Employer's Liability coverage accounts for the cost of defending your business in court. Ultimately, the claim is thrown out, but you still saved $4,000 in attorney's fees.

Errors & Omissions Claims

  • Professional negligence. You neglect to do a site survey before implementing a network configuration. As a result, your business deploys a WLAN that ends up having some areas with poor performance or no coverage at all. Your client sues your business for its negligence, and your E&O policy covers the cost of hiring a defense attorney and settling out of court.
  • Mistakes and errors. Your business creates a WAN for an ecommerce company, but fails to implement the redundancy measures that keep a network from screeching to a halt. The network is down for a business day, resulting in $50,000 of loss, which they sue your business for. Your Errors and Omissions Insurance covers the cost of the claim.

IT Business Insurance Quotes for System Network Design Professionals

Protect your business from the high cost of unexpected accidents, mistakes, and oversights. Simply apply for business insurance quote, and depending on your needs, we could take you from quote to bind today.