ERRORS AND OMISSIONS INSURANCE & PROFESSIONAL LIABILITY INSURANCE FOR TECHNOLOGY COMPANIES

ERRORS AND OMISSIONS INSURANCE IN AN “IT” (INFORMATION TECHNOLOGY) COMPANY – Should you have it?

“I don’t think so… we are so careful and we have the best employees. I don’t think we will need E&O coverage!”

THINK AGAIN!  PURCHASE TECH E&O INSURANCE TODAY!

Remember, Tech E&O insurance isn't just a slang term.  Tech E&O is different from traditional E&O insurance as it is crafted to cover software and technology companies by combining professional liability with cyber liability to better cover the unique exposures of a technology company.

Even though your employees are exceptionally talented, there is great risk in the increasingly complex world of computers and software systems.  Whether the software you provide is misrepresented or misunderstood, or perhaps a system that you have installed or upgraded fails or is breached, Errors and Omissions coverage (also known as Professional Liability coverage), can protect your business and your assets if a client claims that they have incurred a financial loss due to services or upgrades that your company has provided as a service to them.  These financial losses could have resulted in an oversight or misunderstanding and could result in a lawsuit against your company and your personal assets.

There can be delays, disputes, security errors, incompatible computer equipment, misrepresentations, and misunderstandings, to name just a few issues. Breach of contract is one of the most common causes of legal suits resulting in monetary damages.  One or both of the parties involved can make accusations that the contract was breached and that the breach was material to the contract.  This is why you should consider E&O Insurance coverage. Protect yourself against claims for financial loss.

E&O coverage includes, but certainly is not limited to:

1. Legal Expenses
2. Judgments and Settlements awarded by the court system
3. Other court expenses (such as clerical, witness fees, transcripts etc.)

SO THINK AGAIN!  E&O INSURANCE? SOMETHING CAN ALWAYS GO WRONG AND AT TIMES CAN BE CATASTROPHIC!

Professional Liability Insurance

Definition of Professional Liability Insurance

Whether you’re a start-up business or running an established company, if your cash flow is based on your providing IT services, you need Professional Liability insurance.

Depending on the insurance company, this critical coverage may be called "Errors and Omissions Insurance" or “Professional Indemnity Insurance”.

How Professional Liability Insurance will benefit your business

Professional Liability Insurance protects you and your business against law suits resulting from allegations of professional negligence or failure to perform your professional duties; such as allegations that result in loss of client data, software or system failure and allegations of non-performance.

Clients may request that you provide proof of Professional Liability Insurance, the existence of which you would include in our contract language (as you would for General Liability also).

What are some things you can do to protect yourself against loss?

Errors and Omissions is the first step to protect your company from loss, but there are other considerations you should develop in your loss control program.  Some things you should consider along with E&O might be:

1. Minimize disputes by identifying specific delivery dates and terms
2. Define all warranty limits (note: E&O generally does not cover warranty losses)
3. Review State requirements for yourself and all companies you are doing business with.
4. Maintain appropriate legal counsel
5. Have legal backup for review of all complex issues, contracts and modifications to any contract, etc.

If you are an IT professional, you know that many of your clients are not well versed in the type of technical work that you perform.  Because of this, you are vulnerable to lawsuits if there is a misunderstanding. There is also the problem of the fast moving technological world and the fact that there are old court cases lurking in the system that might rule against the IT business and cause the company to pay out more than they expect. IT E&O coverage will cover the cost of legal representation and help protect you from these unexpected damages.

DON’T LET A COMPUTER VIRUS OR A MISREPRESENTATION GET YOU OR YOUR COMPANY DOWN!

PROTECT YOUR COMPANY AND YOUR ASSETS TODAY WITH TECH E&O INSURANCE!

The coverage experts at InsuranceTrak can help you shop for the best Professional Liability Tech E&O insurance coverage when crafting your technology insurance plan.  The other common types of business insurance for technology companies are listed below:

• BOP-  Business Owner's Policy
• Cyber Liability Insurance
• General Liability Insurance
• Workers Compensation