Posted on 07/28/2011, by Jeremy Edsall
What Types of Insurance Do Web Designers Need?
A web site designer becomes an integral part of the client’s operation, since the web site should be regularly updated.
Coverage to Consider:
Property exposure centers on the high concentration of electronic equipment. Fire sources could include wiring, wear, and overheating of equipment. Fire, smoke, and water could pose significant damage to equipment. Fire protection should consist of chemical applications instead of water. The equipment might be better covered as Inland Marine. Extra Expense is a major exposure since time is of the essence whenever the Internet is involved. The designer must be able to meet the client’s need in a timely manner or the client will find another provider.
Inland marine exposure starts with the computer. A Computer or EDP policy is a must since it picks up not only the hardware but also the software and the media. The designer must take precautions such as frequent backup and off-site data storage. Extra Expense coverage is important since the Web site is expected to always be operational and the designer may be expected to handle problems that arise on the site.
Crime exposure is from Employee Dishonesty and Computer Fraud. Background checks and previous employment verification are important prior to hiring.
Premises liability is minimal since operations are conducted on premises and returned to the client. The exposures that are most needed by the Web site designer are excluded under the CGL policy, so coverage must be found in another using Professional and Errors and Omissions coverage.
Professional liability and errors and omissions are extensive. The Web site designer is responsible for content and must meet the requirements of the client. Errors that misdirect the client’s potential customers as well as inaccurate information create a potential for lawsuits that must be insured against.
Automobile liability is Hired Non-Owned and minimal.
Workers compensation exposure exists in the areas of ergonomics, repetitive motion, and carpal tunnel syndrome. The design of workstations to prevent worker injuries is important.
Minimum recommended coverage:
Business Personal Property, Extra Expense, Employee Dishonesty, Accounts Receivable, Computers, Valuable Papers, General Liability, Employee Benefits, Errors and Omissions, Professional, Directors and Officers Liability, Umbrella, Hired and Nonownership Auto, Workers Compensation
Other coverages to consider:
Forgery, Computer Fraud, Employment Related Practices
Source: Rough Notes, Inc.