What can go wrong?
From straightforward programming errors to losing valuable client information or the complete failure of a system to provide the expected functionality, even the most experienced IT professionals are vulnerable to claims. As IT is so central to the ability of most businesses to function, any mistakes could prove costly to a client and occasionally other third parties.
Claims in this sector are on the rise.
Professional indemnity insurance isn’t compulsory for IT professionals but it is advisable and will be a prerequisite for many contracts. How much protection to buy depends on what services are provided and for whom; a web developer for small local businesses won’t need the same protection as a software designer for a large on-line retailer.
Cover is usually on an Any One Claim basis with defence costs in addition and there are a wide variety of products available on the market from straightforward negligence to full civil liability – with extensions and exclusions built into the body of a wording or added by endorsement. Useful additional covers include protection for infringement of intellectual property rights, virus transmission, employee dishonesty and failure of third party equipment.
Be aware that most policies address the issue of contractual liability, usually providing cover for liabilities that would attach at law in the absence of the contract and no more.
What are insurers looking for?
In essence insurers are looking to establish the likely cost if something goes wrong so they’ll want to know about possible consequential loss. For example, live trading systems or work for financial institutions, process control or the potential to damage physical property or endanger life.
Generally, the larger the contract the more complex the work and the greater the potential for problems, so insurers will ask for overall contract values as well as fees or turnover earned.
Work in the public sector is notoriously problematic because of the sheer scale of projects and the scrutiny they face from users, the media and politicians alike.