What insurance do you need for a government IT contract?

Key points

• In NSW, your supplier level sets your public liability figure.
• A Queensland contract can ask you to keep professional indemnity for at least four years after it ends.
• If the agreement asks for cyber cover, you may need a separate policy, because the standard IT liability cover we arrange has no cyber section.

What insurance does a NSW government IT contract require?

A supplier on NSW Government's ICT Services Scheme must hold three insurances:

• Professional indemnity: $1 million, at both supplier levels.
• Public liability: $5 million for a Registered supplier, $10 million for an Advanced Registered supplier.
• Workers compensation: at both levels, where the law requires it.

If you supply products such as hardware or software, NSW also asks for product liability of $5 million or $10 million, by the same two levels.

These figures are minimums. The agreement for each engagement overrides them, and a bigger or higher-risk one can ask for more.

Do you need $5 million or $10 million public liability for NSW government work?

It depends on the level NSW approves you at.

• Registered supplier: work worth up to $150,000 excluding GST, and low risk. Public liability of $5 million.
• Advanced Registered supplier: work worth over $150,000 excluding GST, or high risk. Public liability of $10 million.

High-risk work needs an Advanced Registered supplier even when it is worth under $150,000, and that level carries $10 million of public liability.

Does a NSW government IT contract require cyber insurance?

Not as one of the minimums. An agreement can add other insurances where they are relevant, such as cover for cyber security or data breaches.

If it does, check what you hold before you agree. On the standard IT liability policies we place, the policy as written carries no cyber section, and some exclude cyber outright. A contract that asks for cyber needs a separate cyber insurance policy, or a technology package that carries cyber. Your own policy may differ. We check its schedule, the page that lists its sections and limits, and any endorsements, the changes the insurer has written onto it.

What insurance does a Queensland government IT contract require?

Whatever your contract's Details name. The Details are the part of the contract the buying agency fills in. Queensland's standard terms for government IT contracts set no type of cover and no dollar figure of their own. You pay for the policies the buying agency names, and they must be in place by the contract's start date.

How long do you have to keep professional indemnity after a Queensland government contract ends?

At least four years, unless the Details set a different period. The rule applies to any required policy written on a claims-made basis, which means the policy in force when the claim arrives is the one the claim goes to. On the policies we place, professional indemnity is written that way.

The policy you held when you did the work is not the one that counts. A client's claim about a finished job can arrive years after you hand it over. So the contract asks you to keep paying for cover on work you have already finished and been paid for.

Meeting the rule means keeping a policy running by renewing it. If you stop trading, run-off cover can keep that past work insured after your last policy ends. Our professional indemnity insurance page explains how it works.

If your work takes a client's systems down, is that a cyber claim?

Usually not. When a client blames your work for their systems going down, that is a professional indemnity claim, and a cyber policy that covers only your own business's losses is not the policy for it.

Does the policy you already hold meet the clause?

Check your policy schedule against the clause for three things:

• Professional indemnity and public liability are both there.
• Each limit reaches the figure the clause names. If you supply hardware or software, that includes the product liability limit, which on many of the policies we place is a total for the year rather than per claim.
• If the agreement asks for cyber, you hold a separate cyber policy or a technology package that carries it.

IT liability insurance puts professional indemnity and public and product liability in one policy. If your limit falls short of the clause, we can arrange IT liability at $1 million, $2 million, $5 million or $10 million.

The clause sets the least the contract accepts. Whether that limit, or cover for your own systems, suits your business depends on the work you do and the other contracts you sign, so we look at those too. Our software developer insurance guide compares IT liability with a technology package.

Frequently asked questions