Sole proprietors face many of the same risks as larger tech companies, which makes business insurance just as important. With the right coverage, your business can recover quickly from a lawsuit, injury, or other incident.
This policy protects sole proprietors from basic third-party risks that most small businesses face. It's often required by client contracts and commercial leases.
Errors and omissions insurance (E&O) protects sole proprietors from legal costs related to their work performance. It's sometimes called professional liability insurance.
This policy protects small businesses from financial losses caused by cyberattacks and data breaches. It's strongly recommended for any sole proprietor who handles sensitive information.
A business owner's policy, or BOP, is an inexpensive way for sole proprietors to buy commercial property insurance and general liability coverage together.
State laws don't typically require workers' compensation insurance for sole proprietors, but this policy will cover medical costs from work injuries, which your health insurance might deny.
This policy, also called errors and omissions insurance (E&O), protects small businesses that provide professional services or advice. It covers lawsuits related to work performance.
This policy covers the cost of property damage caused by incidents that are out of your control. Many commercial landlords require this coverage.
Most states require that you carry commercial auto insurance for vehicles owned by your freelance business. This policy covers costs related to an accident involving a business vehicle.
A fidelity bond compensates the injured party if an employee steals money or assets. Clients might require freelancers to buy a bond in the terms of a contract.
You may think a one-person business is inherently low risk, but sole proprietors face many of the same risks as larger tech companies. From lawsuits to data breaches and fires, unexpected events can devastate a small company.
If something goes wrong with a project you're working on, your clients could hold you responsible, even if the problem wasn't your fault. A client could, for example, pin blame for a data breach on your IT consulting company if you recommend faulty software. Your clients could also come after you for a mistake made by a subcontractor that you hired.
Plus, sole proprietors are not separate entities from their business. That means you're directly liable for business mistakes – and your personal assets are at stake, too.
You may need insurance to comply with the law. Vehicles registered to businesses must be covered by commercial auto insurance. If you drive your own car for work, you'll want hired and non-owned auto insurance instead. This policy is less expensive and pays for your liability in using a personal, leased, or rented vehicle for work.
Business insurance for sole proprietors is essential, especially those without funds set aside for legal fees or other sudden costs. Whether you’re a software developer, IT consultant, or project manager, you’ll need to protect your clients and yourself with the right coverage.
Sole proprietors can save money on business insurance coverage with two packages common in the IT industry.
A business owner's policy (BOP) combines commercial property insurance with a general liability policy.
A general liability insurance policy is the coverage that most small business owners purchase first. It covers basic third-party (non-employee) liability claims, including bodily injury and property damage. The policy is especially beneficial for sole proprietors who invite the public into an office or storefront, handle delicate client equipment, or have an active social media presence.
Commercial property insurance is critical for protecting your work equipment and your building, if you own it. This policy is valuable even if you’re renting an office space, as your landlord’s policy won’t cover your company’s belongings.
Technology errors and omissions insurance (tech E&O) combines errors and omissions insurance and cyber liability insurance.
This policy is crucial for sole proprietors in the tech industry and professional services, as it covers the cost of lawsuits over the quality of your work, including any security recommendations. It bundles errors and omissions insurance with both forms of cyber liability insurance:
First-party cyber liability insurance helps your tech company recover from a data breach or cyberattack. It covers expenses like the cost of credit monitoring services, crisis management, and cybersecurity incident investigations.
Thirty-party cyber liability insurance protects sole proprietors in the event that a client sues you for failing to prevent a data breach or cyberattack at their business. If you find yourself in this kind of dispute, this covers your attorney fees, settlement, court-ordered judgments, and other legal costs.
Chat with an insurance agent to find out more about bundles and discounts.
TechInsurance helps small tech companies compare business insurance quotes with one easy online application. With the right insurance for a sole proprietorship, your business can withstand lawsuits and other costly incidents. Start an application today to find affordable policies from trusted U.S. carriers.