So, question - how many of you resellers carry E&O insurance or Cyber-Insurance to guard against loss of data/hacking/DOS etc.
Having this question pop up a lot recently and being a small reseller if I have to go down that route - it might be time to just close up shop as I don’t want to double my rates to cover the insurance ‘tax’.
Anyway, thoughts?
Cheers
George
This is something I’ve considered off and on, not just for hosting but to cover potential screw-ups in other work, but the rates I’ve been quoted in the US make it unaffordable. The minimum was around US$1500 a year (down the toilet, if all goes well.) For a couple of dozen small hosting accounts that’s out of the question. For those few customers who have a written contract, I’ve relied on limiting liability by including verbiage that claims I cannot be held liable for anything, but it’s not written by a lawyer and whether that would hold up in a court I have no idea (especially for those who’ve never agreed to any particular terms and conditions.) So, I’ve just been ploughing onwards with fingers crossed… if there was something much more affordable I’d look at it again, but it’s not something most insurance companies seem terribly interested in providing economically, or at all, in my experience.
Pretty much the same situtation for me. Rates are ridicolous so I just use the type Service Agreements stating that I can not be held liable…yada yada. The big issue that has come up, though, is that one client which I do a lot of work for is saying that HER insurance will cancel HER policy if I’m not insured. So that is causing angst but I can’t really afford to pay 25 per cent of my annual GROSS income from this side business for insurance; I’d literally have to double my rates to remain in the same financial position that I’m in; blargh. That would of course make me less competative. (not that I need more side work, just don’t want to loose the income stream I have)
In summary: blargh
If you have an actual office location (which I know many of you won’t it defeats the reseller purpose) you can typically get the E&O rider on actual property + business insure very cheaply. Of course all together it isn’t cheap.
We have to insure datacenter, office, E&o and directors now, but it is all in one policy. However this only protects us, it doesn’t pass down to protecting you as insurance doesn’t do that in general.
Not ‘really’ needing it is the problem exactly. I work from home, almost all of my work is done just by me, and I could get by on a $400 computer if I had to with Notepad and some free software (and maybe an old pirated version of Photoshop…) I save everything I have ever done in backups to Amazon for $1 a month or less. If the Vikings invaded and burned my house and raped the dog I could still work from MacDonalds, so I don’t need any other business insurance and have never had any.
George, I do do some subcontract work and have signed at least one contract that said I will ‘indemnify’ the main contractor, but basically I just lied. Any time a potential client made a point of it, which has happened a couple of times, and I sent them a contract that I knew they would read, I didn’t get the business. It depends how much the business is worth to you, I suppose. If it’s a big job/client or something ongoing that brings in a substantial percentage of your revenue, I guess including insurance as a separate item in a quote might not be unreasonable. At least they can see what the demand will cost them. If they really need it to cover their asses, they really have to be prepared to pay for it. I assume the client uses your services because you’re like me and provide good value compared to other ‘big’ companies who have large overheads. There’s no reason you should have to carry all the cost yourself without passing those costs on. If you can spread it to the two or three clients who really matter to you and who might think that’s worth paying for, maybe that’s the way to go.