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What Does Technology Professional Liability Insurance Cover?
Technology professional liability insurance helps protect professionals from any errors, omissions, mistakes, or negligence in the technology services or products they provide. Technology professional liability insurance helps cover:
- Lawsuits
- Legal fees
- Court costs
- Attorney fees
- Administrative costs
- Settlements and judgments
For example, a computer software company develops a new product that damages a client’s computer system. These damages cost the client thousands in repairs. As a result, they file a claim against the computer software company for the errors in the software. Professional liability technology insurance can help cover the costs associated with the claim.In another example, a technology company sets a timeline for developing a new product for a client. The client makes it well known that the timeline for the product is very important to them. The technology company immediately begins working on the product but misses a few key deadlines. This sets the client’s operations back significantly and they file a claim against the technology company for negligence. Technology professional liability insurance can help cover the costs associated with the claim.
In a third example, a computer company fails to provide the most up to date and recent information during the sale of a product to a business. After the business finds out they could have been sold a more advantageous product, they file a claim against the computer company for the omission of information. Technology professional liability insurance can help cover the costs associated with the claim.
Is Technology Professional Liability Insurance the Same As Technology E&O Insurance?
Technology professional liability insurance is commonly referred to as Technology E&O insurance. These are both the same insurance and provide coverage for errors, omissions, mistakes, and negligence in technology services or products provided. However, they both differ from data breach and cyber liability insurance.
Data breach insurance and cyber liability insurance help cover the costs associated with a data security breach. These coverages include:
- Identity protection solutions
- Public relations
- Legal fees
- Liability
For example, a software company has been storing payment information for the customers in their computer system for years. Unexpectedly, the system was hacked and credit card information was stolen. Customers respond by filing claims against the company. Data breach and cyber liability insurance can help cover the costs associated with the claims.
In another example, a manager of a technology company forgot to lock his office door. A thief wanders in and steals personal information of hundreds of customers. These customers then file claims against the technology company. Data breach and cyber liability insurance will help cover the costs associated with the claims.
In a third example, a terminated employee hacks a technology company’s database, stealing personal information for all clients. When the clients find out, they file claims against the technology company for the breach in security. Data breach and cyber liability insurance will help cover the costs associated with the claims.
How Is Technology Professional Liability Insurance Different Than General Liability Insurance?
Technology professional liability insurance is an errors and omissions coverage. It helps cover errors, omissions, mistakes, and negligence in technology services or products provided. This means it is not included in general liability policies. General liability insurance helps cover a business from:
- Property damage
- Bodily injury
- Advertising errors
- Medical payments
- Damage to rental properties
For example, a chair breaks when a customer sits down in a technology business. The customer files a claim against the business for the injuries sustained during the fall. General liability insurance would help cover the costs associated with this claim. Technology professional liability insurance would not.
In another example, a new advertising director releases a campaign with false statements. After customers realize they were misled, they filed claims against the director’s company. General liability insurance would help cover the costs associated with these claims. Technology professional liability insurance would not.
In a third example, while a computer business owner walks an elderly customer out after a sale, she trips and falls on the ground. The customer files a claim against the business for the injuries sustained. General liability insurance would help cover the costs associated with the medical bills. Technology professional liability insurance would not.
Who Needs Technology Professional Liability Insurance?
Technology professionals who provide products or services benefit from technology professional liability insurance. These professionals include:
- IT consultants
- Website developers
- System designers
- Software developers
- Application service providers
- IT project managers
- Computer programmers
- Database administrators
- Computer consultants
- Hardware installation experts
- Integration specialists
- Online security specialists
For example, an IT consultant provides advice to a nearby business. This advice turns out to not be advantageous to the business and they suffer a loss because of it. The business then files a claim against them for negligence in services provided. Technology professional liability insurance will help cover the costs associated with the claim.
In another example, a website developer is hired to build a website for a business. Months after the website is completed, the business discovers it does not work properly. Customers have been unsuccessful on the website for the duration of these months. As a result the business files a claim against the website developer. Technology professional liability insurance will help cover the costs associated with the claim.
In a third example, a hardware installation expert visits a client’s business and installs new hardware directly into their computers. However, the hardware proves to be incompatible with the business’s computers. As a result, the business files a claim against the expert for negligence in services and products provided. Technology professional liability insurance will help cover the costs associated with the claim.
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