How to choose insurance coverage for IT specialists/contractors?
Who is the professional liability insurance offer addressed to?
The professional liability insurance policy is primarily addressed to IT specialists working on B2B contracts. It is commonly accepted to call such specialists “contractors”. The specialist conducting business activity bears full civil liability for the work he/she performs. Unlike a full-time employee, liability is not limited, and you may end up with liability with all your assets.
What does responsibility depend on?
Liability may depend on many factors. The main ones are contractual requirements imposed by companies commissioning a specialist to work. Liability may be limited by contract and may also be to the full amount of the damage caused. The lack of defined restrictions in the contract means that the customer can assert claims without restrictions. Local companies do not always expect insurance from their contractors. This is due to a lack of awareness that such a policy, on the one hand, protects the specialist’s restful sleep, on the other hand, it gives the company the opportunity to transfer third party claims to the contractor’s policy, as a result, the company policy will not be launched. Companies from Western Europe, Asia, not to mention the US and Canada approach the subject of professional liability insurance in a very different way. These companies require professional liability insurance in the international standard (Professional Indemnity Insurance), in the appropriate scope of protection, including contractual liability, pure financial losses, and increasingly, third party liability for cyber incidents. The sums insured start at 1 million euros or dollars upwards. The responsibility of a specialist increases with greater decision-making and independence of work, the more independent the function in the company, the greater the exposure to claims. If you can determine a person’s responsibility, you can also assign an error and claim damages. An important premise to consider buying self-insurance is also working in several places at the same time, which for obvious reasons increases the risk of claims against such a person.
What conditions should a good professional liability policy meet?
A good policy is an important argument that can encourage an international partner to cooperate with a local specialist. In the era of remote work, signing contracts with companies from around the world are becoming everyday life and testify to the mobility of the IT contractors’ market. International companies expect bilingual policies (local language and English), a broad, international scope of insurance, adequate insurance sums and the insurer’s credibility, confirmed by an appropriate rating.
In summary, good professional liability insurance for IT professionals should:
- offer the international scope of Professional Liability (Professional Indemnity Insurance), covering contractual liability, pure financial losses and cyber,
- provide sufficiently high insurance sums, preferably without any sub-limits (protection restrictions),
- have a few exclusions as possible of the insurer’s liability,
- cover the whole world, including the USA and Canada,
- be offered by an Insurer with an international rating,
- be easily accessible without extensive forms, preferably online, without having to provide paper documents,
- have a reasonable price in relation to the scope, it is worth comparing the offers of several insurers.
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