Do I need IT Insurance?

By: CPR Insurance Services  09-May-2011
Keywords: Insurance, General Insurance, Business Insurance

 

Information Technology and Telecommunications (IT&T) companies are facing increasing liability challenges and threats. Even the best managed IT&T companies can find themselves embroiled in legal action from ever demanding customers as the reliance on the products and services provided by IT&T company’s increases.

There are many areas where you may be exposed to economic loss as a result of an error or omission by you or one of your employees. These liability challenges and threats have increased due to a combination of ever increasing need to speed product to market; increased competition in key product and service markets; Increasing customer expectation;  The need to export products and services to foreign markets;

These threats and challenges are made worse with an
Increased outsourcing of systems and data; Increase in fixed price long terms contracts and an ever increasing consumer protection legislation.
 

IT&T companies can face financial loss threats from the following sources:

• Due to systems not being delivered within contractual timeframes;
• Due to systems not performing as intended;
Incompatible, inappropriate or ineffective hardware or software
• Arising from software development risk even when the contract has not been completed;
• Arising from a breach of a third parties Intellectual Property Rights such as copyright, trademark or register design;
• Arising from loss of data, libel and slander and sub contractors acts.

-Data migration difficulties
-Inadequate hardware or software support
-Injury caused by faulty hardware or software
-Physical loss of equipment.

-Business interruption


IT Insurance protects you from claims if your client holds you responsible for errors, or the failure of your work to perform as promised in your contract.

• Professional Indemnity
• Public & Products Liability
• Breaches of the Trade Practices Act
• Defamation
• Dishonesty of Employees
• Loss of data and documents
• Breach of Copyright and Intellectual Property Rights to the Limit of Indemnity
• Confidentiality
• Sub Contractors are named insured’s under the policy
• Loss Mitigation Expense
• Unintentional Breach of Contract
• Trade Practice Acts
• Product Re-call Expenses

Professional Indemnity (PI) insurance provides essential financial protection for IT Professionals against potential losses arising out of their professional service or advice. This can include but is not limited to: acts, errors or omissions made by the IT Professional; allegations of breaching the Trade Practices Act; loss of documents or data; and intellectual property disputes among others.

IT Professionals generally require professional indemnity to comply with professional association requirements, professional standards legislation or to meet the requirements of many clients.

Public Liability Insurance covers IT Professionals for their legal liability in the event of personal injury or damage to property of others during the course of normal business operations or as a result of a product defect.

If your business/practice requires your customers or members of the public to visit your home or business, or if you visit their premises, you should seriously consider taking out public liability insurance for your protection.

Coverage includes legal defence costs - no matter how baseless the allegations. IT Insurance will pay for any resulting judgments against you, including court costs, up to the coverage limits on your policy.



Keywords: Business Insurance, Commercial Insurance, General Insurance, Insurance, Insurance Broker, Insurance Consultants, Liability, Professional Indemnity, Professional Indemnity Insurance, Professional Risks

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