Recommendations for IT contractor (limited company) Insurance

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NightStalker

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#233568 22-Apr-2018 11:55

I'm looking at going back to contracting (IT consulting) after a long break away from it so I'm a bit out of touch with some aspects.
I've got the limited company set up but need to sort out my insurance cover.

I've had a look at a few policies (such as the main banks, State, Delta, Crombie Lockwood, etc) and all seem pretty much similar to each other with variances here and there.

I'm after provider recommendations/experiences for Public Liability and Professional Indemnity insurance. Bonus for any policies/packages that include some small home office inclusion.
Initially just looking at $1million cover to get things up and running. Additionally any insights into tail-end insurance would be grateful, especially how it compares price wise eg is it 30% less etc.

any help is much appreciated.

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#2000594 22-Apr-2018 12:46

Why do you need insurance?

timmmay

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#2000608 22-Apr-2018 13:03

Last time I had this it was AIG through i2i Brokers. I used them as the contracting company I was going through recommended them. In 2014 it cost $322 for $2M insurance, $1M max per claim.

surfisup1000

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#2000633 22-Apr-2018 13:10

BlinkyBill: Why do you need insurance?

because as an independent contractor he can be sued for errors.

And, everyone makes errors.

CamH

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#2000639 22-Apr-2018 13:56

We use State and it seems pretty comprehensive for us. I also had a chat at one point to Finsol (https://www.finsol.co.nz/business-insurance/) who had quite a good setup, but we ended up staying with State as it was a bit cheaper.

BlinkyBill

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#2000680 22-Apr-2018 15:38

surfisup1000:
BlinkyBill: Why do you need insurance?

because as an independent contractor he can be sued for errors.

And, everyone makes errors.

In NZ, when was the last independent contractor in IT sued? Also, you can’t be sued for errors (or more accurately, not successfully). You can only be successfully sued for negligence. Do your reasonable best, and you can’t be sued.

Independent IT contractors don’t need insurance.

NightStalker

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#2000695 22-Apr-2018 16:29

BlinkyBill:
surfisup1000:

BlinkyBill: Why do you need insurance?

because as an independent contractor he can be sued for errors.

And, everyone makes errors.

In NZ, when was the last independent contractor in IT sued? Also, you can’t be sued for errors (or more accurately, not successfully). You can only be successfully sued for negligence. Do your reasonable best, and you can’t be sued.

Independent IT contractors don’t need insurance.

There may be some truth in that however the vast majority of contracts I have dealt with in the past and am looking at now stipulate it as a requirement.

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NightStalker

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#2000696 22-Apr-2018 16:33

timmmay:

Last time I had this it was AIG through i2i Brokers. I used them as the contracting company I was going through recommended them. In 2014 it cost $322 for $2M insurance, $1M max per claim.

thanks @timmmay I'd forgotten about them

1101

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#2001011 23-Apr-2018 12:06

BlinkyBill:

Also, you can’t be sued for errors (or more accurately, not successfully)..

the court case could bankrupt you , even if you win.
worst case scenario : thats what insurance is for :-)

dejadeadnz

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#2001020 23-Apr-2018 12:25

BlinkyBill:

In NZ, when was the last independent contractor in IT sued? Also, you can’t be sued for errors (or more accurately, not successfully). You can only be successfully sued for negligence. Do your reasonable best, and you can’t be sued.

Independent IT contractors don’t need insurance.

This sort of silliness only comes from someone who's obviously:

(1) is not a lawyer; and

(2) who has little understanding of the consequences of being pursued by an entity that is almost certainly far more financially equipped than oneself.

I've been in management in risk or commercial positions for large corporates and have had substantial involvement in, and in many cases held the role of final commercial and/or risk approval of, contract templates for the provision of services for such corporates. For the provision of IT services, it was my experience that it is a standard warranty term that, for example, a service provider warrants that the services provided contains no errors or, in the case of software code, the errors are not such that they would put certain crucial infrastructure at risk or are below a specified threshold. Yes, if you are Datacom or somebody large that we can't do without, we'll probably negotiate on our standard terms. Good luck to any average Geekzone poster getting this luxury, however.

As someone who's also contracted to large corporates, I also know that being able to show that you hold 2 million in PI insurance and 5 million (if not 10) in PL insurance is pretty much a requirement to get oneself prequalified to be eligible to bid for work for most corporates.

And whether one can be successfully sued or not should hardly be the sole determinant of whether you should have insurance. If you make a genuine mistake (and have insurance), which may still nonetheless be sufficient to make you negligent under every single one of the corporate standard form contracts that I have seen, you can relatively safely move on knowing that at worst you have just lost a customer forever. You try and both run a small business and respond to letters from one of the big six firms when there's zero backup behind you. It won't be fun.

wellygary

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#2001021 23-Apr-2018 12:29

BlinkyBill: You can only be successfully sued for negligence. Do your reasonable best, and you can’t be sued.

Independent IT contractors don’t need insurance.

You go onto a site and accidentally knock a cup of coffee on a clients server, they claim it on their insurance, but note it was done by a contractor, their insurance company will chase you ... how much time,money and effort are you prepared to spend to defend yourself...

You need liability insurance as a minimum...

antoniosk

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#2001088 23-Apr-2018 13:27

NightStalker:

I'm looking at going back to contracting (IT consulting) after a long break away from it so I'm a bit out of touch with some aspects.
I've got the limited company set up but need to sort out my insurance cover.

I've had a look at a few policies (such as the main banks, State, Delta, Crombie Lockwood, etc) and all seem pretty much similar to each other with variances here and there.

I'm after provider recommendations/experiences for Public Liability and Professional Indemnity insurance. Bonus for any policies/packages that include some small home office inclusion.
Initially just looking at $1million cover to get things up and running. Additionally any insights into tail-end insurance would be grateful, especially how it compares price wise eg is it 30% less etc.

any help is much appreciated.

Try GSIDirect as well - a little better at the specialist IT stuff.

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antoniosk

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#2001090 23-Apr-2018 13:29

In NZ, when was the last independent contractor in IT sued? Also, you can’t be sued for errors (or more accurately, not successfully). You can only be successfully sued for negligence. Do your reasonable best, and you can’t be sued.

Independent IT contractors don’t need insurance.

You cant work on govt contracts without them - if you dont have any and go through an agency, they will impose their own. It's a mandatory item now, and the cover thresholds are getting quite noticeable because of how much is being asked for as standard

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pillmonsta

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#2004170 28-Apr-2018 16:31

dejadeadnz:

BlinkyBill:

In NZ, when was the last independent contractor in IT sued? Also, you can’t be sued for errors (or more accurately, not successfully). You can only be successfully sued for negligence. Do your reasonable best, and you can’t be sued.

Independent IT contractors don’t need insurance.

This sort of silliness only comes from someone who's obviously:

(1) is not a lawyer; and

(2) who has little understanding of the consequences of being pursued by an entity that is almost certainly far more financially equipped than oneself.

I've been in management in risk or commercial positions for large corporates and have had substantial involvement in, and in many cases held the role of final commercial and/or risk approval of, contract templates for the provision of services for such corporates. For the provision of IT services, it was my experience that it is a standard warranty term that, for example, a service provider warrants that the services provided contains no errors or, in the case of software code, the errors are not such that they would put certain crucial infrastructure at risk or are below a specified threshold. Yes, if you are Datacom or somebody large that we can't do without, we'll probably negotiate on our standard terms. Good luck to any average Geekzone poster getting this luxury, however.

As someone who's also contracted to large corporates, I also know that being able to show that you hold 2 million in PI insurance and 5 million (if not 10) in PL insurance is pretty much a requirement to get oneself prequalified to be eligible to bid for work for most corporates.

And whether one can be successfully sued or not should hardly be the sole determinant of whether you should have insurance. If you make a genuine mistake (and have insurance), which may still nonetheless be sufficient to make you negligent under every single one of the corporate standard form contracts that I have seen, you can relatively safely move on knowing that at worst you have just lost a customer forever. You try and both run a small business and respond to letters from one of the big six firms when there's zero backup behind you. It won't be fun.

This ^^ sort of tripe could only come from someone who's obviously:

(1) never worked in IT, let alone in "corporates".

(2) has no idea of ITIL practices or New Zealand civil liability laws.

When did Datcom become independent contractors... for the "corporate" sector...with Standard Warranty Terms? Are Datacom in the household appliance/whiteware market now? :D

As to negotiating a Warranty Level Agreement (:D) on "your standard terms" (what are those terms btw?) - well...good luck with that.

wellygary:

BlinkyBill: You can only be successfully sued for negligence. Do your reasonable best, and you can’t be sued.

Independent IT contractors don’t need insurance.

You go onto a site and accidentally knock a cup of coffee on a clients server, they claim it on their insurance, but note it was done by a contractor, their insurance company will chase you ... how much time,money and effort are you prepared to spend to defend yourself...

You need liability insurance as a minimum...

Rubbish. http://lmgtfy.com/?q=failover

@blinkybill is 100% correct of course. :) Indemnity insurance is not required for IT Contractors. It's not a bad idea for consultants though, as in OP's case.

http://ip32.publications.lawcom.govt.nz/Chapter+3+-+Alternatives+to+joint+and+several+liability/Contracting+out

BlinkyBill

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#2004182 28-Apr-2018 17:09

wellygary:
BlinkyBill: You can only be successfully sued for negligence. Do your reasonable best, and you can’t be sued.

Independent IT contractors don’t need insurance.

You go onto a site and accidentally knock a cup of coffee on a clients server, they claim it on their insurance, but note it was done by a contractor, their insurance company will chase you ... how much time,money and effort are you prepared to spend to defend yourself...

You need liability insurance as a minimum...

That’s negligence and you should be sued for it. Insurance won’t cover you for that.

BlinkyBill

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#2004186 28-Apr-2018 17:13

I have 30myears as an it contractor, both personally and running a contracting company.

I always strike out the “requirement” for these insurances. If the purchaser insists, then I don’t work there - there is plenty of work. Roughly 99% of the org’s I work for re-think.

There’s the real world, and then there’s experts in risk management, who are rarely experts in managing risk.

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