subject: The Importance of Technology Errors and Omissions Insurance [print this page] If you are an IT consultant or IT company, you may be taking a serious risk by opting not to carry technology errors and omissions coverage. While you may feel that your current General Liability policy covers your business for all exposures and risks you will come across, this is a common misconception and must be understood before you realize you have made an expensive mistake. While General Liability plans do cover IT companies for general claims and bodily injury, all plans have specific exclusions against negligence, programming errors, and various other mistakes. While these are excluded from a General Liability plan, they are covered under Professional Liability contracts. Knowing the seriousness of this exposure is extremely important in you protecting you and your business adequately.
Technology errors and omissions coverage, also referred to as Information Technology Professional Liability coverage, is designed to protect you and your company from lawsuits that could arise if your client holds your actions responsible for a financial loss associated with programming errors, software performance, or failure to provide the service you promised. While you may be confident in the services you provide and skills you possess as an IT professional, the truth of the matter is in a busy industry like Information Technology, you cannot be in 10 places at one time. Because of this, you cannot personally handle every job and guarantee it is done to your expectations. With technology errors and omissions coverage, you will not be held financially responsible for your employees or independent contractors, as your coverage will extend to their actions as well.
All commercial insurance agents recommend that IT Professional Liability Insurance be at the foundation of every IT company's insurance portfolio. Because computers, networks, software programs and various other aspects of the field have a tendency to be temperamental, there are some situations you may not be able to prevent. Whether you are at fault for negligence or not, e&o coverage will cover judgments, settlements and defense costs that arise out of an e&o claim or lawsuit. Going without this coverage could be a serious risk as the costs, even if you are not found negligent, are quite expensive and will add up quickly.
If you are a web hosting company, IT service provider, or you develop and install software for various customers and corporations, you must understand the importance of technology errors and omissions insurance. Find a quality insurance company that is not only stable, but also affordable and will offer you the limits of coverage you need at the price you can afford. With a number of insurance companies specializing in Professional Liability Plans, you will be able to find a plan with the riders you need and the limits that will give you peace of mind.
The Importance of Technology Errors and Omissions Insurance
By: Bob Roberts
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