5 Reasons Why Your Colorado Web Development Agency Needs Business Insurance
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A colossal achievement you had set for your business even back before the launch probably consisted of making clients happy with your excellent work. Of course, there was also the desire to make profits through your successful business endeavors.
As a Colorado web development agency, you can help many businesses create a good presence online, which is crucial in today’s world. But no matter how good your agency is, there is always a chance to run into a problem. Maybe an employee gets the idea to use your processes somewhere else in the state, or a client doesn’t want to push back a deadline when you just can’t meet it.
Well, that’s where insurances come in handy. And for this reason, finding the right insurance for your Colorado business from the very start should be one of your top priorities. Remember that the type of insurance you will get depends on many factors and one of them is your company’s location.
As your company is based in Colorado, it will only make sense to get insurance for Colorado business owners due to the specific cases that are characteristic to this location and projects in the state. If you want to learn about the most important reasons why your web development agency should get insurance, keep reading.
Project scope problems
Business insurance in the realms of professional indemnity can be a life-saver for web development agencies.
For example, you agree to build a web platform to spec, but the client starts complaining about a missing functionality. You will most likely agree to build that functionality for a further fee, which is only reasonable. However, what if the client thinks that it should have been included in the initial bid?
Well, most likely, they will refuse to pay that fee and they will also refuse to complete the payment for the project that was initially agreed. On top of that, all businesses in Colorado and other states as well usually threaten with legal action if the agency does not cooperate.
If you have professional indemnity insurance behind you, that also means that you have a team of legal experts behind your company ready to defend your interests. The first measure would be to reach out to the client and make an attempt to start renegotiating. The client will most likely realize that there is no point in further escalations.
Finally, this kind of business insurance also has a mitigation costs clause in most cases. In simpler terms, it means that the amount owed to them had to be paid by their client beforehand.
Delays and missed deadlines
Image by Małgorzata Tomczak from Pixabay
Web developers often have to work under a lot of pressure chasing tight deadlines. Of course, missing deadlines can cause major setbacks, which is especially true if the project has an important launch date.
Imagine this scenario. Your agency gets hired to design a website, but the project starts to fall apart. Your key developers leave and the pace of the work slows down considerably.
You somehow manage to deliver the website in time for launch but it is missing various functionalities. The client, of course, finds it unacceptable and starts thinking about their next steps.
They have already wasted money on a marketing campaign for the launch, but their anger tells them not to pay the final invoice to your agency. On top of that, they also added additional expenses since they had to hire new contractors to complete what your agency failed to deliver. Consequently, the client threatens to involve solicitors if you try to pursue the payment.
In this case, the unpaid invoice can be settled by the insurer under the mitigation costs clause of the professional indemnity policy. The insurer can also provide the agency with legal advisors to confirm with the client that the project is considered to be over.
What if you get hacked?
There have been multiple cases where experienced companies experience instances of cybercrime. It often happens that an employee exposes their work laptop while searching for something online.
Once a hacker finds their way into their laptop, they also get access to the company’s network and this is how terrible things happen.
So, even if you have a team of trailblazers that know how to code and design, you will still have an area of vulnerability that needs to be covered. Even if you are 100% sure that no breach can happen, it actually can. In fact, cybercrime is considered one of the fastest-growing areas of crime.
Therefore, when looking for business insurance, try to find a package where you get cybercrime insurance too. This kind of insurance covers the financial damages caused by the hacker, including liability coverage for stolen data, cyber extortion, and business interruption.
Client relationship problems
We are all human and we all get into blazing rows sometimes. This doesn’t only apply to our personal lives, but it’s true in the world of business too. A problem that causes damage to a relationship between you and your client can be a catalyst for professional indemnity claims.
Of course, a good agency will always believe that they can make the relationships and projects work even when there are red flags. But sometimes it is absolutely impossible to avoid a row that results in severed ties with a client.
You may think that these situations are not common, but many Colorado employers don’t have enough respect for their contractors. This is usually reflected in poor pay, long hours, and changing scope.
Even though every self-respecting agency will try to walk out of such a relationship, the client will often try to lock you in or rob you of the money you deserve. Sometimes, people even want additional damages for the loss of income due to the failed project.
But if you have insurance, a team of legal experts will be there to deal with the problematic client. They can usually negotiate a fair settlement out of court and also avoid extra fuss.
This is very common among design agencies, but it can also happen to web developers and even content writers.
Imagine having a logo or a content piece created that you plan on publishing on your new website, but all of a sudden you receive a copyright infringement claim as soon as you click publish.
Maybe the content you have just published looks similar to something someone else created. Maybe it isn’t really an infringement, but the worst part about this is that the claim was made and you have to deal with it.
Luckily, good business insurance will pay for litigation and any business disruption your agency may suffer. Don’t allow others to slap your wrist with these claims, and get insured instead.
Your Colorado agency needs to provide good work, it should respect legal boundaries, and it also needs to work within contractual agreements. But, before anything else, make sure to get insured, check out surety bonds insurance. It’s a great way to build trust and confidence in your partnership. There is no point in building your business only for one annoying client or mistake to destroy it all in a matter of days.
Dave is a serial entrepreneur who co-founded Shortlist in 2018, a marketing un-agency that serves as an outsourced dedicated marketing team. He has also co-founded Less.churn, a churn reduction app, prior to selling it in 2018. In 2012, he quit his job to travel the world, and has visited over 65 countries.