Talk to us about your IT Laibility Insurance
Specialist insurance solutions for Software Developers, Tech Startups, Managed Service Providers, and other technology firms
Information Technology Liability Insurance, or IT Liability Insurance, is a combined policy specifically created for Information Technology professionals and contractors. The policy combines Professional Indemnity and Public & Products Liability, which is primarily to help avoid gaps in coverage that can arise if policies are placed separately.
Who needs IT Liability Insurance?
The technology industry is a very diverse and fast evolving sector. It requires a specialist like Barrack Broking to understand the risks and advise on the best structured insurance program.
Our IT liability insurance solutions are tailored to all types of technology businesses, including:
- Managed Service Provider and outsourced IT Solutions.
- Software Developers in the design, development, configuration and sale.
- Hosting and designing websites.
- ISPs and network consultants.
- IT support, training, procurement and facilities management.
- Security/cyber security management and consulting.
- Telecommunications, call centre operations, telecoms setup and consulting.
What is IT Liability Insurance and what does it cover?
Information Technology businesses and contractors are exposed to many types of risks, from cybersecurity attacks, system failures, data breaches to human error. The risk environment is dynamic and firms ought to protect themselves with a comprehensive insurance program that is regularly reviewed and updated.
IT Liability insurance combines cover for:
- Professional Indemnity:
This section covers financial losses incurred by a third-party as a result of your service or advice. It can include claims related to your errors and omissions. It extends to both legal fees and settlement costs. - Public & Product Liability:
This section covers costs related to third-party injury or property damage. It includes claims that result from product malfunction and from day-to-day business activity. The cover is not limited to your business premises. It extends to on-site work, attendance at trade shows and other liabilities incurred out of the office environment.
The coverage offered by each insurer will vary from policy to policy, which is why you should seek the advice from a specialist business insurance broker such as Barrack
Broking. Knowing which policy is best suited to your risks takes careful planning and review, to first understand the risk and then design the right insurance program.
Some IT Liability insurances can be extended to include complementary coverages such as:
- Multimedia Liability.
- The actions of employees and subcontractors.
- Loss of data and documents.
- Defamation.
- Legal breaches, including breach of copyright, IP and trade acts.
- Contractual breaches, including NDAs and confidentiality clauses.
- The cost of mitigating losses once they occur.
- Product-recall.
What are some claims examples that can be covered by IT Liability insurance?
IT Professionals should include complementary insurances in their program such as:
- Cyber Insurance: For costs and losses that your business incurs as a result
of cyber attacks. Covered events can include malware attacks, cyber extortion
and social engineering. - Management Liability: To protect managers and directors for risks
associated with running a technology company. This includes costs related to
mismanagement allegations, legal breaches, third party crime, tax audits and
identity fraud.
What are some claims examples that can be covered by IT Liability insurance?
- Managed Information Service Provider: A business was engaged as an IT security consultant as part of a Managed Services contract. The claimant suffered a cyber ransomware attack where an unauthorised third party gained access to the claimant’s server. It was alleged that the data breach suffered by the claimant was the result of a vulnerability which the insured ought to have identified and corrected. The matter was settled for approx. $200,000.
- Software Development: A business was engaged by the claimant to develop a software that would measure and calculate the cost of a product that the manufacturer could then use to produce the product. It was alleged that the insured failed to communicate to the claimant the need to change the parameters on the new reporting software resulting in incorrect measurements of products being sent to the manufacturer. The matter was settled for approx. $120,000.
- Digital Marketing: A business was engaged to configure automated marketing for the claimant involving the automated dissemination of SMS messages. A formatting error in the SMS resulted in the claimant incurring additional costs exceeding what would typically be charged. It was alleged that the formatting error was due to an error by an employee of the insured. The matter was settled for approx. $20,000.
- Software Development: A business was engaged by a retailer to create a web application based on the claimant’s existing database. The retail business alleged the software developer failed to produce an application that functioned as required resulting in the claimant incurring significant additional costs to develop the final product. The matter was settled for approx. $300,000.
* claims examples taken from Berkley Insurance Australia
Talk to us about your IT Liability Insurance needs
Our team is ready to help you identify and manage your business risks, to ensure you are fully protected. Don’t leave your business vulnerable to the financial and reputational damage of large loss. Contact the team at Barrack Broking today.
