Ask any IT contractor, and they'll tell you the same thing: IT contractor business insurance is a must-have. Even with the technical know-how and sound practices, you'll still need reliable backup against exposures. This backup is in the form of IT contractor insurance.
IT contractor business insurance has emerged as a staple, especially in today's landscape, where more and more IT professionals are inclined towards working as contractors. A lot of exposures lurk when working as an IT contractor such as errors in code, inability to deliver projects as per agreed-upon terms, and a slew of complaints from customers.
This post covers everything you need to know about IT contractor insurance. We’ll discuss what policies are included, how much do premiums cost, and wrap things up with a review of the companies to consider working with.
IT contractor insurance is mainly designed for independent IT professionals working as contractors for the design and creation of application, software, and cybersecurity systems. This consists of commercial property, business interruption, business owner’s policy, and liability insurance policies.
Eligibility for IT contractor insurance depends on what IT services you provide. In case the insurance company refuses to grant coverage, then know that there are alternative options such as software developer insurance, web developer insurance, and app developer insurance.
You can face lawsuits. IT contractor liability insurance protects you against these. Insurance companies sell this as a general liability policy, professional liability policy, and cyber liability policy.
| CoverWallet | NEXT | Thimble (Best) | Hiscox | |
|---|---|---|---|---|
| Per occurrence limit | $1,000,000 | $1,000,000 | $1,000,000/$2,000,000 | $1,000,000 |
| Aggregate limit | $2,000,000 | $2,000,000 | $1,000,000/$2,000,000 | $1,000,000 |
| Name additional insureds? | Yes | Yes | Yes | Yes |
| Waiver of subrogation included? | Yes | No | Yes | Can be included |
| Deductible | $500 | $500 | $500 | $50/$10,000 |
Professional liability and professional indemnity insurance (often abbreviated as PI PL insurance for IT contractors) sound different but they’re the same policy.
A professional liability policy grants coverage if a client files a claim after sustaining financial losses because of an issue caused by your lapses while providing IT services.
This IT business insurance covers accusations and lawsuits for breach of contract, negligence, missed deadlines, inaccurate advice, and breach of confidentiality. Use the table above to see which insurance company offers the best professional liability insurance for IT contractors.
Some realistic situations where the coverage of professional liability insurance applies are as follows:
You accidentally shared the information about a client’s project through a webpage post, a social media comment, or an interview
The client’s cyber security system was breached while you’re working on it
A client filed a claim after discovering that the figures stated in your report about the metrics of their newly designed marketing software were made up
You failed to finish a project on the date stated in the contract
Professional liability insurance covers accusations of faulty workmanship or defective work if you add a defective work endorsement to it. This will cover the reimbursement to the client if an application, software, or cybersecurity system you worked on didn’t function correctly. Further coverage might apply to extra expenses you must pay to recode and redesign the faulty project.
Data security issues as a result of your negligence or mistakes can be also covered by professional liability insurance. But note that coverage might not apply if a cyber attack or data breach is also involved.
The professional liability policy of IT contractor insurance packages has a $1 million-$2 million per occurrence and aggregate limit. This is closely the same as the limits of the professional liability policy of web developer insurance programs.
| CoverWallet | NEXT (Best) | Thimble | Hiscox | Progressive | |
|---|---|---|---|---|---|
| Per occurrence limit | $1,000,000 | $1,000,000 | $1,000,000/$2,000,000 | $300,000/$2,000,000 | $1,000,000/$2,000,000 |
| Aggregate limit | $2,000,000 | $1,000,000/$2,000,000 | $1,000,000/$2,000,000 | $300,000/$2,000,000 | $1,000,000/$2,000,000 |
| Products and completed operations aggregate limit | $2,000,000 | $1,000,000 | $1,000,000 | $1,000,000 | $1,000,000 |
| Advertising injury coverage aggregate limit | $1,000,000 | $1,000,000 | $1,000,000 | $1,000,000 | $1,000,000 |
| Tenant’s legal liability coverage limit | $100,000 | $100,000 | $5,000 | $100,000 | $100,000 |
| Waiver of subrogation included? | Yes | No | Included | Excluded | Excluded |
| Hired/non-owned auto liability coverage included? | Yes | No | Excluded | Excluded | Excluded |
| Equipment breakdown floater included? | No | Yes | Yes | Excluded | Excluded |
| Can you get a certificate of insurance online? | Yes | Yes | Yes | Yes | No |
| Name additional insureds? | Yes | Yes | Yes | Yes | No |
| Deductible | $0 | $0 | $0 | $0 | $0 |
Accidents can happen while you’re at the office or working at a client’s work space. Those who sustained bodily injuries or property damage can hold you responsible. Because of this, it’s smart to get general liability insurance.
General liability insurance covers medical treatments, reimbursements, settlements, and court judgments if third parties file a claim for bodily injuries or property damage. Use the table above to see which insurance company offers the best general liability insurance for IT contractors.
General liability insurance for IT contractors can take care of these expenses when you find yourself in situations, such as:
You were working on the client’s office and stress testing a software, which is connected to a server. The server got fried during the process and sustained damage. The client demands compensation for replacement or repair expenses.
A client visited you for a meeting. The client injured her foot while opening the door and demands compensation for treating her avulsion
Yes. Some clients will require you to get $1 million-$2 million general liability coverage to get hired for a project. Here are some likely instances where this can happen:
You want to work as one of the contractors for a data center project
The client wants you to temporarily report in their company’s workplace
The project requires the client to leave some of their company’s computers and other IT-related devices in your care
Covering claims for bodily injuries or property damage isn’t the only function of general liability insurance for IT contractors. These add-ons are included in the policy that covers other common commercial exposures:
Rented premises liability coverage-Reimburses the value of a rented office space that got destroyed by fire
Advertising injury coverage-Takes care of legal expenses and court judgments if third parties sue you for misusing trademarks, copying a software’s design and function, and committing slander or libel.
Products and completed operations coverage-Covers the expenses for legal defense and product recall if an output you submitted has significant issues
IT contractor public liability insurance works the same way as general liability insurance. To be specific, this will also cater to the costs if third parties hold you liable for bodily injuries or property damage. Insurance companies in the UK that cover IT contractors in the US are the ones that usually sell this.
Being an IT specialist doesn't necessarily make you immune to cyber criminals. As such, you want to stay proactive in protecting yourself and your clients, especially in today's IT landscape, where the average cyber criminal is not only sophisticated but also unyielding.
Having cyber liability insurance protects you from the consequences of cyber exposures, such as ransomware, malware, man-in-the-middle attacks, denial-of-service attacks, phishing, data breach, and others.
This policy covers the cost of the following:
Data recovery
Data breach investigations
Cyber extortion resolution, including ransoms
Notification of affected customers
Professional services for containing the cyber exposure
Business interruption
Similar to the cyber liability policy of app developer insurance packages, the cyber liability policy of IT contractor insurance packages comes with an electronic data loss endorsement. And so, it will help recover the value of software for work that gets lost or damaged after a covered peril happens.
Get all the best quotes from leading providers in a click of a button!
| CoverWallet | NEXT (Best) | Thimble | Hiscox | |
|---|---|---|---|---|
| Building coverage limit (minimum) | $50,000 | $280,000 | $25,000/$500,000 | $25,000 |
| Contents coverage limit (minimum) | $50,000 | $18,000 | $25,000/$500,000 | $25,000 |
| Outdoor signs | Excluded | $2,500 | Excluded | Excluded |
| Accounts receivable | Excluded | Excluded | $5,000/$10,000 | Included |
| Money and securities | Excluded | $2,500 | $1,000 | Included |
| Lock and keys | Excluded | $2,500 | Excluded | Excluded |
| Business interruption floater | Excluded | Included | Included | Included |
| Equipment breakdown floater | Excluded | Included | Excluded | Excluded |
| Inland marine insurance floater | Excluded | Excluded | $10,000 | Excluded |
| Employee dishonesty floater | Excluded | $5,000 | $2,500 | Included |
You need an office as an IT contractor. This can be an owned or rented location situated in a stand-alone commercial building, a condominium, or coworking space.
The investment for an office computer, furniture, appliances, and other necessities isn’t cheap. And so, it’s smart to get commercial property insurance. Use the table above to see which insurance company offers the best commercial property insurance for IT contractors.
Commercial property insurance, which is also included in website design insurance packages, protects IT contractors like you by recovering the replacement cost or actual cash value of the office if it gets destroyed or damaged by:
Fire
Theft
Vandalism
Civil commotion
Riot
Sinkhole collapse
Volcanic action
Lightning
Weather
Impact
Falling objects
Aircraft
Vehicle
Sprinkler leakage
Yes. Taking care of costs if something happens to the office is just one of the functions of commercial property insurance. You can also use this policy to get a reimbursement for the value of computers, security cameras, furniture, appliances, power generators, tablets, printers, fax machines, and photocopiers that got damaged or destroyed due to a covered peril.
No. Commercial property insurance only covers tangible business properties. Software and electronic documents are considered as intangible business properties. Therefore, the coverage of commercial property insurance doesn’t apply if these get lost or damaged.
Yes. Commercial property insurance can cover your home office and even the house itself without any conflicts with your existing homeowner’s insurance.
| CoverWallet | Thimble | NEXT (Best) | Hiscox | Progressive | |
|---|---|---|---|---|---|
| General liability aggregate limit | $2,000,000 | $1,000,000/$2,000,000 | $1,000,000/$2,000,000 | $300,000/$2,000,000 | $1,000,000/$2,000,000 |
| Commercial property coverage limit | $50,000 | $25,000/$500,000 | $280,000 | $25,000 | $25,000 |
| Optional policies can be added? | Yes | Yes | Yes | Yes | Yes |
| Name additional insureds for free? | Yes | Yes | Yes | Yes | Yes |
| BOP discount? | Yes | Yes | Yes | Yes | Yes |
Not all IT contractors have the budget for insurance. This is why insurance companies offer a business owner’s policy as a cost-effective protection against liabilities and commercial losses. Use the table above to see which insurance company offers the best business owner’s policy for IT contractors.
A business owner’s policy, also a common inclusion in IT consultant insurance bundles, works as a two insurance product-in-one. To be clear, this functions as a general liability and commercial property policy at the same time. You can use a business owner’s policy to:
Cover claims for bodily injuries, property damage, copyright infringement, slander, and libel
Recover losses if tangible business property is damaged or destroyed by fire, theft, vandalism, and other covered perils
A business owner’s policy helps IT contractors save money because its cost is cheaper than buying general liability and commercial property insurance as separate policies. Insurance companies offer a 10% discount on their BOP premiums.
| NEXT (Best) | Thimble | Hiscox | |
|---|---|---|---|
| Aggregate limit | $5,000/$10,000 | $2,500/$5,000 | $5,000/$25,000 |
| Covers hired and borrowed equipment? | $5,000/$10,000 | $2,500/$5,000 | No |
| Miscellaneous equipment also covered? | $5,000/$10,000 | No | No |
| Offered as an endorsement to general liability insurance? | Yes | Yes | Yes |
| Deductible | $500 | $500 | $0 |
Tools and equipment insurance is a coverage exclusive to the desktop computers, laptop computers, server computers, and other devices you use to finish projects. Use the table above to see which insurance company offers the best tools and equipment insurance for IT contractors.
Tools and equipment insurance will cover the cost for repairs or replacements if the devices you use as an IT contractor gets damaged or destroyed because of:
Fire
Theft
Vandalism
Electrical surge
Electrical breakdown
Mechanical breakdown
Impact
Water damage
Some insurance companies allow their tools and equipment insurance for IT contractors to cover borrowed, rented, or leased equipment. Others, on the other hand, aren’t as generous.
When availed as an optional policy to commercial property or general liability insurance, tools and equipment insurance provides $15,000-$50,000 coverage. Tools and equipment insurance that’s underwritten as a stand-alone policy provides up to more than $1 million coverage.
Suppose an unexpected event results in your office space being unusable. And what if a fire breaks out and your monitors, hard drives, laptops, and other equipment you need to get your work done are set ablaze?
If you have a business interruption policy in place, you will be up and running as soon as possible.
Suppose you need to relocate, the policy will be able to cover all your moving costs and the rent you'd be required to pay. Further, if you were forced to lease more equipment, the policy will pay for that too. Finally, if you were unable to get back up and running, it will also cover the lost income.
Business interruption insurance for IT contractors lasts for 30 days. You can extend the duration of the policy up to 360 days with an endorsement.
No. Insurance companies don’t design their business interruption policy to cover war and terrorism. However, endorsements can be introduced to cover these exposures.
Include a workers' compensation insurance policy in your IT contractor insurance bundle if you work with one or more part-time and full-time employees.
Your business mainly works with computers and other IT-related devices. Nonetheless, this doesn’t stop your employees from experiencing hearing loss, headaches, muscle pains, and repetitive strain injuries.
Workers' compensation insurance sees to it that you don’t bear the financial losses when granting compensation to an employee who sustained work-related injuries or diseases.
This insurance will cover medical treatments, hospitalization, medication, rehabilitation, lost wages, and death benefits on your behalf.
Umbrella liability insurance will take care of situations where your existing general liability or professional liability insurance is near its limits or is fully exhausted. In case, the general liability or professional liability policy can’t fully cover a claim, umbrella liability insurance will cover the remaining amounts on your behalf.
| Cost per Month | Cost per Year | Deductible | |
|---|---|---|---|
| General liability insurance | $42 | $504 | $0-$500 |
| Professional liability insurance | $80 | $960 | $0-$500 |
| Commercial property insurance | $50 | $600 | $1,000-$2,500 |
| Business owner’s policy | $90 | $1,080 | $500-$1,000 |
| Workers compensation insurance | $55 | $660 | $2,000-$5,000 |
| Cyber liability insurance | $115 | $1,380 | $500-$1,000 |
| Umbrella liability insurance | $45 | $540 | $1,000-$2,500 |
| Tools and equipment insurance | Depends on the value of tools and equipment to be covered | Depends on the value of tools and equipment to be covered | $500-$1,000 |
The average IT contractor insurance cost is $42 per month or $504 per year for a $1 million general liability policy. There are a number of factors that determine how much you pay. These include:
Your insurance coverage needs- Basically, the type of coverage you require and the policy limits you choose affect your premiums. If you were to go with higher coverage amounts, you'd typically have to pay higher insurance claims
Claims history- More often than not, the insurer will review your prior business claims history to determine how much they charge your insurance costs
Business location
Size of the payroll
Fortunately, you can save on IT contractor insurance by following a few tips. These include:
Comparing business insurance quotes–Evidently, not all IT contractor insurance providers price their policies the same. This could be advantageous to you as you can compare the different business insurance quotes from multiple insurers to find the best possible offer for you
Bundling up different policies- A great tip to help you save on your IT contractor insurance costs is to bundle two or more policies together. An example would be to bundle your general liability and commercial property policies together into a business owners policy (BOP)
Implement stricter safety protocols-Most providers will offer discounts and thus reduced premiums if you were to stay for a particular period without filing a claim. As such, you want to implement a strict safety program at your IT contracting business
Settle premiums in full-You are viable for a discount if you can pay your premiums for the whole year instead of making monthly payments
Here’s another table showing how much the recommended carriers charge IT contractors for a $1 million general liability insurance:
| Cost per Month | Cost per Year | Best for | |
|---|---|---|---|
| NEXT | $25 | $300 | Best overall; Fastest general liability insurance for IT contractors |
| CoverWallet | $27 | $324 | IT contractor insurance quotes comparison online |
| Tivly | $29 | $348 | Comparing IT contractor insurance quotes over the phone |
| Hiscox | $34.65 | $415.80 | IT contractors looking for a coverage with automatic renewal |
| Thimble | $32 | $384 | Temporary coverage |
| Progressive | $35.17 | $422.04 | Flexible payments |
| State Farm | $40.80 | $489.60 | Liability insurance for small IT contractors |
Get all the best quotes from leading providers in a click of a button!
To reiterate, IT contractor insurance is a must-have, especially in today's IT landscape, where IT contractors are susceptible to threat actors. You've got to work with the best IT contractor insurance companies to secure the best coverage.
We've compiled a list of the best companies available. Read some of the reviews below to know their pros, cons, and cost of a $1 million general liability policy.
Best overall
Issues an online proof of insurance instantly
Fastest general liability insurance for IT contractors
Great customer service and reputation
Excellent rates
Outstanding value for money
Get a 10% discount if you buy two or more policies
Couldn’t find any
NEXT has established itself as a one-stop shop for small IT contractors looking for quick coverage. This company doesn’t have an IT contractor insurance package. However, you can avail this company’s computer and information systems management insurance program which offers the following:
$1 million general liability insurance
$1 million professional liability insurance
$280,000 commercial property insurance
Workers compensation insurance
The contractor policy allows you to name sub-contractors as additional insureds. The prerequisite is to have these subcontractors have the right licenses or credentials.
Best for: Best overall; Fastest general liability insurance for IT contractors
Average cost: $25 per month
Our rating: 10/10
Compare IT contractor insurance quotes online
Easy online policy management
Add additional insureds during or after you bought your policy
Cancel your coverage anytime with no additional charges
Not an insurance company but an insurance broker
CoverWallet grants coverage for IT contractors by compiling the quotes of different insurance companies. You can compare these through CoverWallet’s online quotes comparison platform. Your IT contractor insurance package from CoverWallet will consist of the following:
$1 million-$2 million general liability insurance that can be bundled with commercial property insurance in a BOP
$1 million professional liability insurance
$50,000 commercial property insurance
Cyber liability insurance
Workers compensation insurance
Best for: IT contractor insurance quotes comparison online
Average cost: $27 per month
Our rating: 10/10
Responsive customer service
Compare IT contractor insurance quotes over the phone
A partner of many reputable insurance companies
BBB accredited
You need to call to get a quote
Some companies that’s part of this list might refer you to Tivly (formerly CommercialInsurance.NET) if they can’t provide coverage. Tivly specializes in creating a tailored package that suits your unique needs. To get covered, you need to call a Tivly representative who will curate the most useful policies and bundle them on your behalf.
Best for: Comparing IT contractor insurance quotes over the phone
Average cost: $29 per month
Our rating: 10/10
A team of dedicated claims representatives are available
Customization options available
Umbrella coverage through CyberPolicy is offered
Prospective policyholders can get a quote and purchase coverage online
Help is available from licensed insurance agents over the phone
Excellent financial strength
A higher number of customer complaints than expected
Hiscox prides itself in offering IT contractors tailor-made policies that suit any IT professional. In just minutes, prospective policyholders can get an online quote. Hiscox’s tailored coverage features the following policies:
$300,000-$2 million general liability insurance you can bundle with a $25,000 commercial property insurance in a BOP
$1,000,000 professional liability insurance
$250,000 cyber liability insurance
Best for: IT contractors looking for a coverage with automatic renewal
Average cost: $34.65 per month
Our rating: 8/10
Insurance policies available by the hour, day, or month
Scalable plan model
Fast and efficient quote process
High-quality mobile app
Ability to pause coverage
Instant certificate of insurance
You can’t reach customer service by calling
If you are an IT contractor in need of long-term or short-term coverage, then Thimble is the provider for you.
Thimble covers IT contractors through its IT project management insurance program that offers the following:
$1 million-$2 million general liability insurance with customer property, business equipment, and cyber liability endorsement
$1 million-$2 million professional liability insurance
$25,000-$500,000 commercial property insurance
Workers compensation insurance
Best for: Temporary coverage
Average cost: $32 per month
Our rating: 8/10
Great rates
Excellent financial stability
Fast, easy quotes
A variety of discounts
24/7 customer service
Flexible payment plans
IT contractor insurance is offered through a third party
Progressive Commercial offers IT contractors an insurance package through Progressive Advantage Business Program. A policyholder has a pool of experts who then help you customize your IT contractor policy based on your business needs and budget. The basic coverage will include the following:
General liability insurance
Commercial auto coverage
Professional liability insurance
You can add on:
Business owners policy (BOP)
Workers Compensation Policy
Best for: Flexible payments
Average cost: $35.17 per month
Our rating: 7/10
The BOP offered by State Farm leaves room to add professional liability insurance for comprehensive IT contractor insurance.
Agents are available in all 50 states.
Customizable insurance policies
Limited online capabilities
Prospective policyholders can't get a quote or purchase the policy online
Quality of service depends on the individual agents
State Farm has been in business since 1935 and has since made a name for itself by providing comprehensive insurance to small IT contractors. This liability package will include standard general liability coverage for contractors at an affordable rate. Other policies you can get are:
Workers' compensation policy
Commercial auto coverage
A business service bond
Commercial umbrella coverage
Best for: Liability insurance for small IT contractors
Average cost: $40.80 per month
Our rating: 7/10
This place is an absolute joke of a company and should be ashamed of the way they conduct business. I was hurt on the job at the end of July and it took them just shy of 7 weeks to issue out a paycheck to me. Yes the amount was back dated but still. Not many have the luxury of not receiving a paycheck for almost 2 months. To top it all off, the original adjuster marked me down for the wrong state which caused a problem from the get go, I've had 3 different adjusters now since each one can't seem to figure out the simplicity of my claim. All my paperwork which includes, my job, house, and drs visits all are from the same state and city but yet some how I have been filed under a completely different state 1500 miles away. They do not answer your phone calls or emails no matter how many you leave. I've had to escalate my frustrations to the supervisors of each of these individuals in order to even get some kind of response. I've had more communication and information given to me about my claim from the customer service representatives then the actual adjusters.......... please tell me how that works?! A serious overhaul needs to happen here in order to serve your clients the way they deserve to be taken care of. 10/10 do not recommend this company to a single soul on earth
I have never had the displeasure of working with a more incompetent and disrespectful person in my life. I’m an injured worker and the adjuster that was assigned to my case was named Carrie Furgeson. In the past 6 weeks that I’ve been injured and out of work I have only been able to get ahold of her twice, not for lack of trying. I have left countless voicemails, countless emails, and she ignores them all. When I am finally able to get ahold of her I’m greeted with terrible customer service. She is rude, she talks over me and I’m hardly able to get a word in edgewise. She spelled my name wrong on my documents even after I spelled it for her properly countless times, this caused a whole new issue with my bank. I have bill collectors from the hospital calling me demanding payment and Carrie Furgeson won’t do a single thing to help, or to get them paid. All of my documentation is in Colorado, my job is in Colorado, my address is in Colorado, all my Dr offices and appointments have been in Colorado and Carrie still managed to hold my claim because she wasn’t sure what state she needed to file it under. It’s been 6 weeks since my Injury and my company still hasn’t received the wage paperwork to fill out so they can get me my correct wages. When she’s not ignoring me she’s answering my questions with “I don’t know” well I don’t know how she got this job, because apparently she doesn’t know anything about it. She is a disgusting morose individual inside and out and I genuinely wish her the worst in all of her future endeavors. I highly recommend you don’t use this company. Please if you are a business owner and your looking into this company please don’t use them. I’m sure they have the cheapest payment and that’s why companies use them in the first place, but you will be doing your employees a grave disservice by forcing them to venture into this absolute dumpster fire of a company. I would rate 0/5 if possible but 1 was the lowest I was allowed.
Their general liability insurance purchase process is simply the best online experience I've ever had in my life!
As long as they cover your line of business, you're literally covered! best rates, best coverage, best online experience, best professionals, can't be happier that I chose them!
It really can't get any better than this... wow
Not all those who wander are lost.
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