Why Is Professional Indemnity Insurance Important To The Technology Industry?
Information technology is the backbone of many businesses yet is poorly understood by many. There’s often an enormous mismatch between client and professional expectation, probably unique to the information technology industry as regards to professional indemnity claims. 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.
Below are some professional indemnity claims that technology companies have faced:
• 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.
Do not leave your business unprotected! For help and advice on Technology Professional Indemnity Insurance please contact Ben Butler on 0118 9165 481, or complete one of our enquiry forms