This week I interviewed Jim Cochran from TechInsurance.com who focus on finding the right insurance for computer technicians. I asked him what sort of insurance should a computer technician have, what does it cover and what is the worst thing that can happen to an uninsured technician.

I started TechInsurance in 1997 after a client asked me to find professional liability insurance for his start up IT consulting business. Finding the coverage he needed at an affordable price was an unpleasant and time consuming experience. It occurred to me that if I could make the process very efficient that IT people would be more inclined than most small business owners to look for business insurance online. For once I was right. We now insure more than 13,000 independent contractors and IT services business. Over the past few years we have expanded to offer coverage to firms outside of IT at our Business Insurance Now site. But we like IT best.

What sort of insurance do you offer/broker to technicians? What are some basic things that each of these cover?

Many times our clients are driven by contract requirements. Their contract might require them to carry General Liability or Workers’ Compensation insurance, and sometimes Professional Liability insurance. In many cases these clients are focused at satisfying the contract at the lowest possible price. That is fine. We are solving a business issue for these clients and are happy to do that. In other cases, our clients are primarily concerned about protecting their business. These clients are more focused identifying and addressing the risks they have as an IT services firm.

The most common types of insurance we provide IT business are General Liability, Workers’ Compensation and Professional Liability.

Basically General Liability and Property covers you in the event that someone comes on you business premises and is injured, or you go to a client’s site and injure someone, or damage some property. These policies can be bundled with coverage that insure your business property (computers, etc.) in the event of theft or fire.

Workers Compensation is coverage for “on the job” injury your company employees. It provides medical and disability coverage and can also include coverage for the employer’s liability in the event an employee is hurt. It is required by law in many states.

Professional Liability (Errors and Omissions) insurance provides coverage in the event you are sued by a client alleging that an error or omissions in the delivery of your technical services resulted in a financial loss on the part of your client—lost data, network penetration, software failure, etc. These can be expensive claims.

What is the bare minimum amount or type of insurance a new onsite computer repair business should have (assuming they are very tight on money)?

They should carry $1,000,000 in General Liability (including coverage for their property so that damage to client property is covered) and they should carry $1,000,000 in Professional Liability. The $1,000,000 figure is sort of the universal standard and you don’t save much is anything by carrying less.

What is the ideal coverage for a computer repair business (assuming money is not an issue)?

Actually the ideal and minimum are the same. However, as companies grow, add employees, and take on bigger projects their risks change.

If a technician is working out of a home office, does the homeowners insurance cover the tech?

Some homeowner policies can be endorsed to include General Liability insurance. But these polices may limit coverage to claims that occur at the residence. It is important to understand that these policies also do not cover Errors and Omissions.

When a computer business needs to take on employees, do they need to change their insurance policy?
Employees make Workers’ Compensation insurance a necessity. We also see that our clients get more concerned about Errors and Omissions when they are no longer doing all the work.

What’s the worst that can happen to an uninsured computer technician?

Without the right type of insurance, if a technician makes a mistake he or she can get sued and not have the resources to handle the customer’s demand for compensation. This can include the cost to restore data, replace equipment, lost revenue or other damages.

Where can we go to find out more about your insurance products for techs, or to receive a quote?

We have a pretty informative site and online application at http://www.techinsurance.com. Currently, we are only able to provide coverage to US based consultants.