In the world of technology, it’s always a given that things can go wrong. Unintended errors may occur because of software programming or performance issues or any other aspect of providing a technology product or service. When this results in customers experiencing a financial loss, they make take legal action to be compensated. In order to provide a level of protection against this type of risk, a Technology Errors and Omissions liability policy is needed.
This type of insurance coverage could include costs associated with a legal defense for accusations made against a technology company. It could cover court costs and subsequent judgments against a company, up to the limits of the insurance policy. Each technology errors and omissions insurance policy is different in scope. You will need to work directly with a professional risk advisor to ensure that the policy you are considering matches the exposures that are unique to your firm.
Business Trends that Drive the Need for Technology E&O Coverage
We have observed a number of notable changes driving the need for Technology Errors and Omissions coverages. They include the fact that more business contracts now require evidence of E&O coverage, which naturally will increase the size of business contracts and the amount of time and attention you need to devote to them.
What Can Technology Firms Do to Mitigate their Exposures?
There are several ways to mitigate exposures to electronic disputes. Chief among them is a legal review of all purchase orders, contracts and license and service agreements. You will need to review limitations of your liability in all documents, as well as any warranty disclaimers in your contracts. It’s also prudent to review severability clauses, indemnification procedures and arbitration provisions.
But Our Commercial General Liability Policy Will Cover Technology Exposures – Right?
Wrong. Some technology firms assume that their Commercial General Liability policy will respond to claims arising from programming errors or software failures. It is unlikely that a Commercial General Liability coverage would respond to a technology related claim. Firms also make the assumption that by simply purchasing any Technology Errors and Omissions insurance policy, all of their technology risks will be covered. Smart firms find a way to get educated on Technology Errors and Omissions risks and cyberliability insurance products. They will weave together their internal and external risk control measures before purchasing an insurance program for their organization.
Establishing Technology Errors and Omissions and protection against cyber-related risks is an important part of your business. Working with a TechAssure Association member can help you identify your exposures and establish a risk management program for the best protection. Please give us a call for more information.