These days, technology is all the rage.
People aren’t clambering to open liquor stores and bakeries anymore.
Everyone wants to be the next Internet icon like Facebook and Content Warfare (I kid)…
When traditional, “Main Street” businesses are opened the owners are utilizing technology, such as websites, social media, and mobile applications (or “apps”) to advance their brand and drive sales.
When I talk about technology companies I am not referring the use of the technology but rather the creation, testing, sale, distribution, and service of technology.
Technology Insurance Errors & Omissions
This is not Cyber Security Liability.
This is Technology Insurance Errors & Omissions, (also referred to as Professional Liability), for companies that provide professional technology based products or services. This goes for:
- Designing websites,
- Building computer databases,
- Setting internal and external computer networks,
- Programming everything,
- Data migration,
- And any other type of production, service or consulting involving computer, programs, networks or the Internet.
Always remember that General Liability covers Slips, Trips, Falls and Property Damage.
Your Professional Services, claims related to expertise in a field, in this case Technology, are going to be excluded from the General Liability policy.
Technology Insurance Errors & Omissions Claims Scenarios
Scenario #1:
- A computer consultant is hired to create a new customized database system that directly links to a sales organizations CRM (customer relationship management) system. After the completion of the job, the Client sues the computer consultant because the system is not functioning as designed and the Client is losing business from the decreased system efficiency. Not covered under General Liability (this also means you have NO defense coverage even if the claim is frivolous). You must have Technology Insurance Errors & Omissions…
Scenario #2:
- A website designer is helping a current Client who operates a local retail store and wants to expand their business to the Internet by adding e-commerce solutions including an online payment feature to their website. A few months after implementation a hacker steals the credit card and personal information of all the people who have bought the Client’s products online. The website designer is brought into the class action suit against the retail store for Identity Theft because of the website designer’s involvement in implementing the e-commerce features to the website. Again, not covered under General Liability (this also means you have NO defense coverage even if the claim is frivolous). You must have Technology Insurance Errors & Omissions…
Please remember that these claims scenarios are very broad and generic and are only two of the hundred plus different ways you can be sued for a error or omission in the course of your professional service.
The Rub
For many Technology Professional I would argue that Tech E&O is more important than a General Liability policy. Don’t give me the old, “I have a Hold Harmless Agreement in all my contracts…” Doesn’t mean crap.
It also doesn’t matter if you are actually at fault or not. If you are brought into a lawsuit you are going to have to pay for a lawyer and The Defense Costs Alone Could Bankrupt You.
I highly recommend you look at Technology Errors & Omissions coverage if you are at all involved with Technology.
Thank you
P.S. If you were so inclined The Murray Group would love to be your insurance agent. You can inquire about receiving an insurance proposal by Clicking Here.
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Disclaimer: This article is for informational purposely only. There is no legal advice being suggested or proffered and the author assumes no responsibility or liability for the actions taken or not taken by the readers based upon such information.
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