Why do computer repair and service businesses need insurance?
Your clients trust you with their most sensitive information and devices. Insurance for computer repair businesses can help pay for lawsuits over accidental damage, data breaches, and other risks, such as damage to business property while in transit.
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6 insurance policies every computer repair business should consider
Technology errors and omissions insurance
Technology E&O insurance can help pay for lawsuits over mistakes made by computer service and repair technicians. Intellectual property (IP) and media liability coverage can often be added.
- Failure to resolve a problem
- Computer repair mistakes
- Accusations of negligence
General liability insurance
This policy protects your computer repair service from basic risks that most small businesses face. To save money, bundle general liability insurance with property coverage in a business owner's policy.
- Accidental customer injuries
- Accidental damage to a customer's computer
- Libel, defamation, and copyright lawsuits
Cyber liability insurance
This policy helps your business recover from a data breach or cyberattack. It's recommended for any computer repair shop that handles sensitive data, like phone numbers.
- Lawsuits from clients affected by a breach
- Notifying affected clients about a breach
- Fraud detection and monitoring
Fidelity bonds
A fidelity bond provides reimbursement if one of your employees steals from a client. It’s also called an employee dishonesty bond, and is often required for client contracts.
- Unlawful data access by a technician
- Employee embezzlement
- Other employee theft or fraud
Workers’ comp insurance
State law usually requires that any computer repair business with employees purchase this policy. It helps pay medical costs from work injuries and illnesses.
- Medical bills from employee work injuries
- Disability benefits
- Lawsuits over work injuries
Commercial auto insurance
If your business vehicle is involved in an accident, this policy can help pay for legal defense costs, repairs, and medical bills. Almost every state requires this coverage for business-owned vehicles.
- Injuries caused by your vehicle
- Property damage caused by your vehicle
- Vehicle theft and vandalism
Computer repair and service business insurance costs
Average costs come directly from policies purchased by TechInsurance customers.
General liability: $30 per month
Errors and omissions: $59 per month
View more expected costs.
Factors that can influence your premiums include:
- Your computer repair and installation services offered
- Value of your business property and equipment
- Types of insurance products purchased
- Policy limits and deductibles
- Number of employees
- Claims history
- Annual income
- Endorsements, including intellectual property coverage
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Common questions about computer repair insurance
Are computer repair businesses required to carry insurance?
Small business insurance is often required by law for computer repair businesses, depending on certain factors. You may also need specific policies depending on your clients, commercial space requirements, or lenders.
Most small computer repair businesses start with a general liability insurance policy, which covers many common business risks, such as customer injuries, third-party property damage, and advertising injuries.
Here are examples of situations where computer repair professionals may need other policies besides general liability coverage:
- You have a business-owned vehicle. Companies with vehicles are required to carry commercial auto insurance in most states. If you're using rented, leased, or personal vehicles, you'll need hired and non-owned auto (HNOA) coverage.
- You have employees. Most states require workers' compensation insurance after hiring your first employee. Sole proprietors are generally not required to carry workers' comp, but it's highly recommended to protect against common injuries and illnesses that personal health insurance may not cover.
- You apply for a business loan or rent a commercial space. Landlords and lenders often require general liability insurance in order to sign a contract.
- Your customers or partners request coverage. Clients and partners may refuse to work with your computer repair business unless you carry certain types of insurance. E&O insurance and a fidelity bond are common requests from clients.
Even very small businesses are not immune to the same lawsuits and liabilities that some of the biggest companies face, so having the right policies is critically important.
You can speak with a licensed insurance agent if you have questions about the best insurance policies for your computer repair business needs.
Even when not required, why is business insurance important for computer repair techs?
Computer repair businesses and consultants are susceptible to making mistakes, and those mistakes can have costly consequences.
The right insurance policies can help protect you and your business from errors, injuries, accidents, and other risks that expose you to liability and lawsuits. Because customers often leave their devices in your care, custody, and control and because technicians often transport costly equipment, having the right coverage for these risks is essential.
Professionals in the computer repair field often elect to carry both errors and omissions (E&O) insurance and third-party cyber insurance. These policies protect against common lawsuits arising from incorrect advice, mistakes, data breaches, and other cybersecurity incidents, including IT support mistakes and service outages.
Insurers often combine these two policies into one: technology errors and omissions insurance, also called tech E&O.
Tech E&O covers a range of the major risks faced by computer repair businesses. For example, if you make a faulty software repair that results in major data loss for your customer, your tech E&O policy would cover legal defense and settlement costs if the customer decides to sue over the error.
If a data breach, ransomware attack, or other cyber incident occurs at your own computer repair business, you'd need a standalone first-party cyber insurance policy for protection (outside of a tech E&O policy). This policy will help you pay for customer notifications, credit monitoring, legal expenses, and regulatory fines.
Many policies also include access to a 24/7 breach response hotline, allowing you to act quickly and minimize potential damage.
Do computer repair companies need to carry professional liability coverage?
Computer repair service businesses, like most technology companies, aren't legally required to carry professional liability insurance. It is, however, highly recommended to avoid many of the common risks associated with running a computer repair business.
Professional liability coverage protects you if a client files a lawsuit against your computer repair business for an error, mistake, or professional negligence. This policy is also called professional indemnity insurance or errors and omissions (E&O) insurance.
Computer repair businesses frequently rely on their professional expertise to perform work duties, which can lead to costly errors. For example, if one of your technicians misreads a diagnostic tool and incorrectly repairs a machine, it could result in in substantial downtime for a client. If your client decides to sue, your professional liability policy would cover the legal expenses.
You can bundle professional liability insurance with cyber insurance into a technology professional liability policy, commonly referred to as tech E&O. This is a more affordable option than purchasing the policies separately.
What other business insurance policies do computer repair shops need?
Computer repair businesses often invest in additional policies to cover a wide range of insurance claims.
You may want to consider the following:
- Tools and equipment insurance, also called inland marine insurance, provides coverage for company property while it’s in transit over land or stored at an off-site location. This coverage helps pay for the repair or replacement of tools and equipment if they're lost, stolen, or damaged.
- Electronic data processing (EDP) insurance protects your electronic equipment, including diagnostic machines and computers, if you experience data loss due to a power surge, fire, or covered natural disasters.
- Business interruption insurance helps cover lost income and other financial losses resulting from a covered property loss, such as damage from a fire or natural disaster. It's also called business income insurance.
- Business owner's policy (BOP) combines a general liability insurance policy with a commercial property policy to cover many of the most common liability risks, as well as your business property. You can also add equipment breakdown insurance as an endorsement to help your business recover from machinery failure.
- Hired and non-owned auto (HNOA) insurance covers your business from vehicle accidents if you or your employees are using personal, leased, or rented vehicles.
- Bailee coverage protects customer devices that are left in your care, custody, or control for service or repair. If a client’s property is damaged, stolen, or destroyed while in your possession, this policy can help pay for the loss.
Having the right policies and a certificate of insurance (COI) for your policies can help keep your business safe.
How can you save money on computer shop insurance?
It's easy to save money on business insurance through a few simple steps:
- Shop around. Get quotes from several insurance companies to find pricing that matches your budget. TechInsurance makes this possible with one easy online application.
- Bundle policies. When you buy policies from the same provider, it's often possible to combine coverages for a discount. The most common bundles are a business owner's policy and a tech E&O policy.
- Pay the annual premium. Insurers offer two options for paying your premium: monthly or annual. Paying the full annual amount usually costs less.
- Risk management. Avoid costly claims that can increase your premiums by reducing your risks. Eliminate clutter around your computer repair business that could cause accidents and bodily injuries, use detailed written contracts, and include redundancy in your systems.
- Implement cybersecurity measures. Using safety measures, such as multi-factor authentication, to protect from digital vulnerabilities can keep your business safe from potential cybersecurity incidents.
- Personalize your coverage for your needs. Picking lower coverage limits or a higher deductible can reduce your premium. However, it's important that you pick a deductible you can afford to pay in the event of a claim.
