IT contractor professional indemnity insurance is the cover agencies ask for most often and the one whose exposures have changed most. A contractor who writes, configures or advises on systems can cause a loss that is entirely financial and entirely enormous, and the same work increasingly touches personal data, which brings a second cover into the conversation. Within IT contractor insurance, professional indemnity is the section a client's contract names first.
The classic professional indemnity exposure
Code that did not do what the specification required. A migration that lost data. A configuration that left a system unavailable during a trading period. An architecture recommendation that cost the client more to unwind than to build. None of these damages property; all of them cost the client money, which is what this cover answers for. That is the whole case for professional indemnity insurance: IT contractors cause losses that are financial, not physical.
Where cyber cover sits beside it
If a contractor's work leads to a breach of the client's systems or data, the claim can sit in professional indemnity, in a cyber liability section, or be argued between them. Holding both from one insurer, or at least telling each about the other, removes the argument. Several contractor policies now bundle a cyber section for exactly this reason.
How much professional indemnity insurance do I need as an IT contractor?
A stated minimum for professional indemnity alongside public liability and employers liability, named in the contract before the engagement starts. Public sector frameworks often specify higher figures. The certificate is usually wanted before the first day, which is why contractors buy annual cover rather than per engagement.
Contracting through a limited company
The company is normally the insured, and the policy should name it rather than the individual. Where the contractor also works through an umbrella arrangement or occasionally as a sole trader, say so, because the wrong named insured is one of the few errors that can leave a valid claim unpaid.
Questions people ask about IT contractor professional indemnity insurance
Why do IT contractors need professional indemnity?
Professional indemnity for IT contractors answers losses that are financial rather than physical: failed migrations, unavailable systems, code that did not meet the specification.
Do I need cyber cover as well?
Increasingly yes, where the work touches client data or systems. A claim can fall between the two covers, and holding both from one insurer avoids the argument.
What limit will my agency require?
A stated minimum in the contract, often higher on public sector frameworks. Check before accepting the engagement, because the certificate is usually wanted before day one.
Should the policy be in my company's name?
Yes, if the company is what contracts. The named insured should be the entity that signs the engagement.
What IT contractor business insurance sits beside professional indemnity?
Public liability and employers liability, which agencies and end clients name in the contract alongside professional indemnity, and a cyber section where the work touches client data or systems.
Sources
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