Professional Indemnity Insurance for IT companies…..And the need for specialist cover!

by Scott on 10/01/2012 in Professional Indemnity Insurance

Information technology is the backbone of many businesses yet is poorly understood by many. There is often an enormous mismatch between client and professional expectation, probably unique to the IT industry as regards professional indemnity claims. Moreover, the IT industry ranges across an extremely wide variety of services, from out-sourcing through bespoke software, hardware sales, configuration and installation to recruitment and internet services. IT risks used to be treated as “Miscellaneous” but, as the industry has emerged into one of worldwide importance, so the understanding of the legal profession (and thus insurers) has led to a specific focus on IT in its own right.

At Macbeth Insurance Brokers we provide the level of cover that specifically addresses the issues encountered by IT professionals.

Below are some genuine examples of typical things that could go wrong for an IT Professional

•             The insured designed a customer management software package. It was alleged that the software failed to comply with the agreed functionality. Amount paid: £350,000

•             The insured configured an off-the-shelf software package for use by the client, and sold and installed associated hardware. There were serious difficulties following installation, leading to the client refusing to pay the balance outstanding and threatening a claim. Insurers paid the outstanding balance to the insured, avoiding the expense and reputational damage of a legal case. Amount paid: £55,000

•             It was alleged that there were substantial deficiencies in the design of a software package, resulting in the system failing to meet the client’s requirements. Amount paid: £450,000.

 For help and advice about Professional Indemnity insurance please contact Scott Sayce, Head of Professions on 0118 9165 483, or complete one of our enquiry forms

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