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  • Vignesh Burugupalli

8 Ways to Lower Professional Liability Insurance for IT Solopreneurs

1. Bundle the Professional Liability Coverage with the same carrier as your other LOBs

  • Bundling insurance plans and getting multiple policies from the same company can often reduce the cost of insurance by taking advantage of certain offers and discounts from providers. Companies can give 5-25% off policies when bundling.

2. Ensure that the estimated revenue in your insurance application is accurate.

  1. Don’t underestimate the estimated revenue as that may lead to hefty Audits on the backend

  2. If you overestimate the revenue and there isn’t an audit, then you may overpay for your insurance.

3. Ensure that the type of work that you are doing is accurately represented in your actual operations. For example, if your line of work is limited to application development, you do not want to represent that you are also an internet service provider.

  • If you fail to accurately represent your line of work, you may end up overpaying for insurance due to the cost to cover risks that come with operations that you might not even be involved with.

4. Shop the Professional Liability Insurance with Common IT Professional Liability Carriers:

  1. Chubb

  2. Hiscox

  3. The Hartford

  4. Travelers

  5. Lloyd’s of London - CFC

  • Carriers such as those listed above offer tailored insurance and flexible payment options, marking them as desirable providers of professional liability insurance.

5. Shop the Professional Liability Insurance with multiple Insurance Retailers - some may have access to markets that others do not.

6. Negotiate the terms of Insurance Coverage with your Client, decreasing Insurance Requirements. Once the requirements are lowered, decrease the insurance coverage you carry.

7. Increase Deductible

8. Decrease the amount of time since the Retroactive Date

  • Some insurance policies, like Professional Liability, are written on a ‘Claims-Made’ basis. That means coverage is afforded if both the claim occurrence and submission occurs between the retroactive and expiration dates of the policy.

  • Changing the Retroactive Date can eliminate coverage for any losses that occur before a certain period. Insurance providers can only cover liability claims while your policy is still active. Having gaps in insurance coverage can lead to you having to cover legal and other related expenses out of pocket without the assistance of your insurance policy.

  • Be wary: reducing the term of the retroactive date will lessen the coverage for prior errors & omissions covered by Professional Liability Insurance. Additionally, your clients may ask for you to carry Professional Liability Insurance for a certain time period. Ensure that you’ve analyzed your risk before taking this step.

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