All business enterprise forms need business insurance, so also is there a need for IT business insurance.
Although there are typical grounds in all business enterprise forms, there probably will be a desire to negotiate some insurance issues regarding IT business insurance, depending on the actual business model put in place. You can find a number of possible business models which can be followed in IT. A specific company may use a single model; say the fixing of personal computers, while another business enterprise may involve itself in the advertising, repairing, and upkeep of both software and hardware.
Another organization could deliver only consulting services, while yet another could be purely working in the layout and writing of software applications. So, even though there clearly might be a necessity for IT business insurance, it apart from the standard business demands, would need some thinking and talking to the insurance companies to arrive at an equitable model based on the actual business model that must be followed. All of the totally obvious business risks should be included as would be pretty conventional in any business insurance protection. Supplemental items to check out would be such that are unique to the IT industry, or the specific business design that you made a decision to run.
Let’s examine the model in which you sell, repair and maintain computer hardware as well as fix and maintain software programs, basically, a pretty all-inclusive IT business. Starting at the selling side but disregarding the financial and related troubles, since they will be included in the standard plan one would think about the selling action and decide whether an issue like misrepresentation by sales agents might lead to any claim or action against you? Could any claim or activity result of late delivery of equipment or non functioning products on commissioning or such like occurrence? Could any problem arise from putting in equipment alongside existing hardware or connecting them in a network? Would it be your liability with issues of such nature? Whether these are a function of IT business insurance to cover, or, of the sales contract, could be debateable, but you need to probe your organization to ensure that you are covered in the case of disregard of your staff by any means.
Turning to the upkeep and fixing of equipment, there is the issue of a customer’s equipment being on your premises. Who is accountable for such equipment while on your property? What happens when the technician switches on the machine, after repairing it and it goes up in a puff of smoke needing thousands of Rands of more spares to repair? What happens when you drop the customer’s machine and it breaks? What will happen when it is ripped off or wrecked, is that a purpose of IT business insurance? The development and maintenance of software could be complicated where it was developed to customers’ specific features and it is malfunctioning after you have witout a doubt overspent on its development. It now needs another 50 man hours of attention to bring it to spec level. Is that an operational cost or could you insure against such eventuality? Perhaps a silly question, but you have to keep probing your organization hazards and test that up against the response from the insurance carrier.