Just as with any business, there is a degree of professional risk assumed by those doing business related to information technology. Whether you are a software developer, run a telecommunications company, or are a network administrator, there are professional risks associated with the failure of products or improper service. These failings can lead to significant losses for your clients, and may result in a law suit against you or your company. This is where technology errors and omissions insurance comes in.
If a technology related claim is filed against you or your company related to errors such as faulty software performance, programming errors, hacking due to software code vulnerabilities, or defective components or devices, these items are typically not covered in your commercial general liability policy. You need to carry additional insurance to protect you against such claims. Once you are properly insured, technology errors and omissions insurance will cover expenses from resulting legal defense costs and legal judgments, up to the limits outlined in your policy.
Moreover, technology errors and omissions insurance not only covers the business owner, but any W2 employees or 1099 subcontractors who work for them. Technological devices will occasionally fail and information technology technicians will make errors. A customer’s network may be penetrated due to software code lacking in sufficient security. Allegations may be presented regarding software copyright infringement. In any of these cases, carrying sufficient errors and omissions insurance specifically developed for those in the IT world can protect you, your company, and your employees from devastating legal ramifications.
