In representing more than 900 IT clients across the United States, I have personally experienced the fact that many IT business owners think their business insurance covers client data loss situations or network security failures. I have news for you — they don’t. And it’s especially important for managed service providers working with healthcare, legal, or CPA clients to understand this.
All business insurance policies contain a professional services exclusion. This is why a doctor preforming surgery must go out and obtain medical malpractice coverage or a CPA firm preparing tax returns for their clients must get accountants professional liability. More than 70 classes of business need professional liability, errors and omissions (E&O), or malpractice insurance to protect their organizations in the event that a client holds them responsible for a service they provided — or failed to provide — that didn’t have the expected results.