• Does a Technology business have any Liability Insurance Issues?

    Posted on 09 January, 2019

    Any organisation that develops, manufactures, licenses, sells, provides, advises, integrates any form of Technology and related services is exposed to litigation. The failure of a product, service or incorrect advice will expose that organisation to claims.

    Legal Confusion
    There is no consistent legal opinion as to whether software developed for a client is a “product” or a “service”. This is particularly important because most software developers are required to provide evidence of Professional Indemnity insurance under client contract conditions – but claims in respect of Products liability are excluded so there would be no cover if software is deemed to be a product.

    Circuit board manufacturers & other hardware suppliers need Products Liability insurance to protect their legal liability for injury or property damage claims in respect of their products.

    They also need Professional Indemnity for in-house design activities if applicable.
    However, the most likely claim against a circuit board manufacturer or hardware suppliers is for financial compensation as a result of the failure of the product to perform as specified in a contract, rather than an injury or property damage liability claim. Claims for financial loss are not covered by a Products Liability policy which is the domain of Professional Indemnity insurance.

    Technology Liability Insurance is the best solution
    Technology Liability Insurance provides protection for organisations against legal liability for economic loss arising from the failure of their products, services and or advice in the conduct of the business in respect of acts, error or omissions and includes alleged breach of contract. It covers both hardware and software businesses.

    This Insurance combines Professional Indemnity and Public & Products Liability insurance coverage to respond to the unique exposures of the Technology industry. Technology Liability insurance eliminates the potential coverage gaps which can occur when these policies are arranged separately due to legal issues. The cover includes defence costs associated with defending legal actions – even if you are found not liable.

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