Hello,

 

I own my own Web design firm in Pennsylvania, USA. We just started out as a legal entity and I was wondering if I really need to get business liability insurance. Does it depend on what I'm doing or should I have it regardless.

 

Please let me know.

 

Thank You

You "should" have it but most web designers don't. Actually there was a whole discussion about business insurance here a few months back and the general consensus was that no one had it, IIRC.

 

If you don't have clients coming to your premises (house, etc.) then it's less of a concern. However, a policy with good legal cover for mistakes you might make, and for which a client might sue you, is not a bad idea. Lawsuits can be really mundane (a wrong date on some ad copy, etc) and you can protect yourself by using a good contract and getting everything in writing, but at the end of the day people can sue you for whatever they want - baseless or not - and you'll need resources to fight it.

I took part in the earlier discussions that came to nothing...

 

What I failed to mention was that the insurance broker asked me what I was protecting myself from...I said I was hoping they would tell me......

 

and that was it end of conversation.

 

Nevertheless I'm still worried.

 

Ultimately the only thing that ever bothers people is money.

 

I keep trying to come up with a scenario where I could cause someone financial harm (in the course of my business) and (with what I do at present - small as it is) I cannot think of anything.

Ultimately the only thing that ever bothers people is money.

 

I keep trying to come up with a scenario where I could cause someone financial harm (in the course of my business) and (with what I do at present - small as it is) I cannot think of anything.

 

Being compulsively negative, I can think of a few scenarios (ultimately it depends on what you promise your customers):

 

- You publish a website with incorrect information; maybe a wrong date for a promotion or event (copy editing and getting the client to sign off on the proofs should help, but not everyone does this). This causes a marketing nightmare and lost revenue for your client.

 

- Your client breaks their own website and blames you (you can't provide free tech support forever). The site is down for weeks or more and they lose business.

 

- Your client can't get the site to do what they want, either because of missing features or missing training. Perceived loss of business follows.

 

That's to say nothing of frivolous lawsuits.

 

See? We all need lots and lots of insurance!

I think I have been lucky so far because work has come by word of mouth from people I knew and it has been reasonably informal.

 

I could see where it could go wrong if things were less friendly.

If you have started out as a legal entity then you should seriously think about getting insurance. If you have more than one employee you should also think about Employers Liability Insurance (is mandatory once you go beyond five - as far as im aware).

Hey guys,

 

Goldstein, your in the USA so I am not really sure how it works over in the states (sorry), I am familiar with the UK system though...

 

Liquid, I can think of quite a few reasons you need cover and have seen lots of claims on IT policies. It obvisouly depends on exactly what you do for a living, expat makes some good points... a good professional indemnity policy will cover you against:

 

- Any allegation of negligence on your part. This could arise from accidently losing or publishing your clients confidential details, mistakenly adding or removing part of their site, accidently passing a virus to your clients, writing some code for them which subsequently contains errors, not delivering a project on time and being sued for it.. Also, if you use a subcontractor to do some work for you then they can be covered as well.

 

- Also you will get coverage if you are accused of breaching someone else's IP rights. You will also get coverage for any defamation (libel + slander) as well. Also, if you get sued for breach of contract...

 

- Remeber, that you DON'T need to bein the wrong for someone to make a claim, its just the way of things these days, people will try and sue to get out of paying money etc. Your PI policy will respond and pay your defence costs for you. I have seen a few of these recently....

 

It depends on what you do for a living of course... a lot of brokers do not understand PI risks at all.. they will likely try and sell you a policy to cover your laptop though!! If you want to tell me what you do, i can try and be a bit more specifc about why you might need cover, and give you some examples...

 

bazzie

Hi all. I am also interested in this. I am surprised many business wouldn't have it. I have setup a Ltd company for my web development so am looking for insurance. I was threatend with being sued last year for someones emails going down for just over 24 hours due to Fasthosts changing everyones passwords so it scared me a bit. Quite petty by the client as it was not down for long, but I have to take threat of legal action seriously.

 

I was hoping some people could recommend good insurance companies for web developers, the quotes I have so far were too high for me, I think about £40 per month which I think is excessive for what we do.

 

I think I would need:-

• Professional Indemnity - I think this will cover me for making mistakes and things and someone sues (such as email issue above)?
  
• Public Liability - this would cover me for clients visiting my business (which is my house) in case they have an accident?
  

(I was going to contact my home insurance for covering people coming to my house, and see if that covers it)

 

So was hoping to find someone to pay around £20 per month for this. Anyone know a good insurance company?

 

P.S. I went to morethan.com and even though I chose web developer they have a clause saying I must not plan to undertake work relating to:-

• Web Hosting where not outsourced to third party web hoster
  
• Websites capable of financial transactions not outsourced to third party providers (e.g. Protx, Paypal etc)
  
• Domain name registration and/or renewal
  

Hi infocom,

 

Sounds like that client might have just been looking for a quick buck, wouldn't be the first and definatly not the last. I imagine you already do this, but its always good to ensure your terms and conditions exactly mirror those of your hosting firm, and that should always leave you in a position to claim against the hoster, last thing you want to do is garentee 99% uptime, and the hoster only garentee's 98%! As you will be liable for any difference... It's amazing what a strongly worded letter from an insurance company can do to claims like that.

 

When insurance companies started writing IT professional indemnity they all excluded domain name work as they were worried that the policyholder would forget to renew them - most decent IT insurers are much more flexible with this now, and unless someone is soley registering domain names (i.e. no design work) this exclusion should not be required.

 

The other exclusions seem a little heavy handed, but that will depend on your turnover and what sort of sites you are designing - again, i suspect more than are being overly cautious here, probably beuase they do not write a lot of IT professional indemnity.

 

For professional indemnity the pricing depends on the level of cover that you want, you will have seen when you did your quotes that you can get cover ranging from 100k - 1m (typical limits) and as you would imagine each of these will cost slightly different. Which you go for depends on the size of your contracts, if they are all small sites with small firms then 100k or 250k shoudl be fine - although its quite common for people to buy 1m now as standard. Also the copverage will vary from different insurers, but my guess would be possibly closer to £25 a month, for a 100k limit on an IT specific policy from a good insurer.

 

Your public liability will likely be 1m or 2m. And this should cost you no more than £5 a month. Most good insurers will do an interest free direct debit for you.

 

I know someone who will be able to help you out, but i don't have their contact details with me, i shall dig them out asap and post them up, they know their stuff when it comes to IT insurance.

 

Cheers,

 

bazz

Hi bazzie

 

thanks a lot for the advise. yeah I'd be happy to get some details. you could post or pm me. I have contacted a couple of people and had no response yet, and as state morethan can't do it. I called morethan and they admitted yes its a problem, they cannot provide insurance nor can they easily change these terms. They did say they will be tryting to change them in the next year.