The Risks Network and Security Consultants Face
You work on client equipment every day, which means, in addition to run-of-the-mill business risks, you also face liability for data breaches and professional mistakes. Let's look at the common risks a network and security consultant faces and how business insurance can help:
- A client's employee trips over your cables. You're rewiring a client's office and running cable along the floor. When the client's employee walks through a doorway, she trips over your network cable and shatters her wrist and breaks the tablet she was carrying. A few weeks later, you are sued for $50,000 in medical expenses and damaged property. A General Liability Insurance policy can help cover these costs.
- A client claims you gave bad advice. You recommend an ISP to your client, but its poor performance leads to latency issues. The client is fed up, but can't break the contract. They sue you over the poor recommendation. Any time a client sues you for what they consider a failure in your professional obligations, an Errors & Omissions Insurance policy can help to pay for your expenses.
- Your client suffers a data breach. As a small network consultant, you specialize in setting up LANs and other networks. One of your clients, a small corporate law firm, is hacked when malware infects its computers and exposes its data, including financial records, filings, contracts, stock certificates, and their clients' home addresses and Social Security numbers. In order to comply with the law, the firm reports the breach to all its clients and investors. This decimates its reputation, and the firm files a lawsuit against you, alleging $200,000 in damages. Like many E&O policies, yours includes Cyber Liability Insurance, which can help pay for your legal fees and keep your business afloat.
- Your office is vandalized. It's Halloween and you rush home to take your kids trick or treating. The next day, you walk into your office to discover that some bigger "kids" spent their night on tricks by vandalizing your office and breaking (or stealing) your computers. Don't be spooked – if you have a Business Owner's Policy, your Commercial Property Insurance can help fix the damage and replace broken items.
- An employee falls off a ladder. One of your employees is on a ladder so they can run network cable above the ceiling tile. As he reaches to pull a cable, the ladder tips over. He falls, hitting his neck against a desk and dislocating his shoulder. He’s rushed to the hospital, has surgery, and is out of work for months. Between surgery costs, rehabilitation, and lost wages, you'd have to pay more than $100,000 for the injury, but Workers' Compensation Insurance can cover the bills. If your employee sues over the injury, Employer's Liability Insurance (often part of a Workers' Comp policy) can help cover the legal fees.
- You take on a financial services client. When a bank, investment firm, or financial services company hires your business, it might require you to purchase Fidelity Bond. This insures them against theft by one of your employees. So if an employee of yours steals from the client, your Fidelity Bond can reimburse them for the loss.
- A fired employee sues you. After multiple one-on-one meetings with an employee who isn't pulling her weight at the office, you decide to fire her. A few weeks later, she sues you over wrongful termination, claiming you didn't give her adequate guidance and instruction. Your Employment Practice Liability Insurance can help cover the legal expenses, even if the lawsuit is frivolous.
Risk Management Guides for Network and Security Consultants
Network and security business insurance is a necessary part of risk management, but it's not the only tool at your disposal. In a lot of cases, you can take steps to prevent accidents and lawsuits before they become insurance claims.
At TechInsurance, we provide a free resource center to help small tech businesses prevent lawsuits. Check out our risk management resources, including free sample contracts, free quotes, an IT risk management blog, and other resources for busy IT professionals.