Do Technology Companies Need Professional Indemnity Insurance??
Technology companies face unique risks and require specific insurance coverage’s to protect their business from financial loss. Technology professional indemnity insurance is a key element of risk management for a technology company in today’s world.
Typical reasons that professional indemnity claims are made against a technology company include:
• Programming errors
• Poor customer communication
• Problems with large integration/installation projects
• Development problems
• Problems with combining or integrating software or hardware components
• Customer changing project scope (often referred to as “project creep”)
• Turnover of key personnel
• Short cuts during testing
• Poor accounts receivable controls that require the tech company to sue their customer for fees owed and this results in a countersuit for negligence in the performance of the tech services/products
• Shortfall in externally furnished products or externally performed tasks
Typical allegations in litigation for professional indemnity:
• Breach of Contract
• Failure to Perform
• Breach of Warranty
• Intellectual Property Rights Infringement
So the answer to the question is YES technology companies do have a need for professional indemnity insurance either by contractual requirement or simply to protect them from a legal landscape that is continuing to evolve.
If you operate in the technology industry and would like advice on or to discuss your professional indemnity requirements please contact Adam Lawrence on 0118 9165 484 or complete one of our enquiry forms.