What is Information Technology Liability Insurance?
Information Technology (IT) Liability insurance covers professional liability from the provision of IT services or products, such as errors, omissions, or negligence. It protects you and your business against legal liability occurring due to the failure of your IT products, services or advice. IT liability insurance differs from Cyber insurance in that it is specifically tailored for IT professionals providing tech services or products, whereas Cyber insurance provides broad coverage focussed on digital threats and data breaches.
Who needs IT Liability Insurance?
Any business that develops, manufactures, sells, licenses or integrates any form of IT or related services should consider IT Liability insurance. This includes:
- Software developers
- Electronic and Telco equipment manufacturers
- Telecommunication providers
- Internet service providers
- IT Consultants
- Web Hosting services providers
- Hardware/Software resellers
- IT Maintenance and Repair Technicians
Client Example
The Insured is an IT consulting firm that develops an e-commerce platform for a retail client. The platform has significant bugs causing frequent crashes and security vulnerabilities to the client. This leads to lost sales and customer data exposure and the Insured were unable to resolve the issues promptly. The client sued the Insured company for a breach of contract and were seeking compensation.
The IT Liability policy was able to reimburse the Insured a total of $220,000 to cover legal defence costs, settlement costs, and reputation management.
