5 Reasons to Purchase Tech E&O Coverage

Don’t think you need insurance as a tech professional? Think again. Here are 5 reasons to seriously consider a professional liability policy.

  1. Clients are Crazy – Expectations – You are going to build the world for them for free, and have it done yesterday. There will be no bugs, and it will generate them millions. Ring a bell? Despite any documentation you may sign or expectations you may set, they will view it through their rose-tinted bias, what they heard, and what they expected, and will ultimately bulldoze all the rest. While none of this is realistic, its what they expect, and when you fall short of their pipe-dream, that sweet gig can go side ways quickly.
  2. Clients are Crazy – Scope Creep – As with any project there will be features, and requirements that change along the way. Partly because the clients will have better ideas, and partly because as they test they will have a better vision of what really needs tol happen. We know this creates tech debt. It will cause bugs, and it will put the project behind schedule. That could cost them money. Money they may look to recoup from you.
  3. Clients are crazy and rich? – Maybe or maybe not. Who is your client? Is it a large fortunate 500? Is it a small startup with VC money behind it? Regardless, they have the money to pay you, and that means likely the money to pay a lawyer. Tech E&O pays for your defense as well as any settlements or judgements.
  4. It makes you look credible – If given the choice, which do you think clients will chose? The guy that looks legit and appears to have his act together as underscored by his insurance policy?
  5. You may be required to – Clients are crazy like a fox – If you are looking at a bid that is requiring you to purchase insurance, what the potential client is looking for is that you have Tech E&O insurance. So if you are asked to provide a ‘certificate of insurance’ this is likely what they are looking for.

The bottom-line is that every business needs to protect themselves from the perils of their business. Tech professionals are no different. The trick is getting a policy that protects you from the risks you face. Start your quote online today!

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What coverage can a technology E&O policy provide, and why do I need it?

You are looking at Tech Malpractice, good for you, but what coverage do you need? What coverage is available. Gila Insurance Group has partnered with CNA to provide coverage to tech professionals. What kind of coverage will you need, and what are the options?

Technology E&O – Tech E&O is really important for tech professionals that developing software, websites or consulting. Ultimately it covers you for your professional liablity. It covers you if you fail to perform as expected. This could mean any number of things from errors and bugs, a breach contract, damaged data. Even if you don’t actually do any of these things if a client believes that you did things can go sideways quickly. A tech E&O policy will cover the cost of defense meaning the lawyer fees, the cost to prove you innocent, and any fees you incure through the court. In addition, if you are found to be liable this policy will cover you for any settlements or judgements that you are responsible for. The cost of defense make this policy well worth the trouble.

But with any policy there are exclusions which are important to understand so that you can get the coverage if needed. If you have a tech E&O policy we are able to add several coverage options that are vital depending on what you do.

Network and Security Privacy – Data Breaches of companies large and small are more and more common. If you are working with sensitive personal data, you have a HUGE exposure to lawsuits. This is because you could be home responsible for the destruction or alternation of data on a client’s network or maybe you leave data exposed and there a breach. Let’s take a look at one scenario.

You are working on a program that has a shopping cart. You are using an existing library, so not a whole lot of exposure, you inadvertently leave a back door open that leads to a hack of your client, and sensitive data is exposed. Your client goes through the process and notifies the clients, pays for the credit monitoring, and they start to investigate how this happened. They find you are responsible, what happens next? The answer? They sue you. How do you defend yourself and pay the settlement? While not exactly a part of the tech E&O policy you are able to get a network and Security Privacy coverage. This is similar to cyber liability coverage, but as a tech professional its slightly different because you may be the potential cause of the loss, which ultimately makes you liable and subject to lawsuits and judgements.

Media Liability – Media liability is a coverage that protects you from advertising, personal injury, or intellectual property claims. This is primary is meant for people that are creating and distributing content for customers. This would include website designers. Social media marketing specialist and consultants and others that are distributing media across the interwebs. Advertising/Personal injury covers the idea of defamation of others and product disparagement. Intellectual property covers copyright and trademark infringement.

General Liability – If you own real estate as a part of your tech business you will need general liability. Also, depending on what your software does you may need general liability to cover the bodily injury and property damage your software can cause.

Regardless of what kind of tech professional you are we can customize the coverage you need to protect you from the perils of doing what you do giving you and your clients the confidence to tackle whatever IT project you might be looking at. Start your Quote line now!

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What insurance should a tech professional have – General Liability or Professional Liability

Looking at the requirements for an IT bid? Sure, it includes the standard stuff, who you are experience, a registration with some system, terminations, inspection and testing, bugs, and insurance. Wait what? Yes, more and more contracts for IT projects are requiring a certificate of insurance. While this is common in other industries a certificate of insurance is relatively new for the tech industry. So normally you just call the local agent, and he gets you something, you don’t really know what and viola, a contract. The trouble is that even amongst insurance agents a request for a certificate of insurance for a tech professional is an odd request.

Often agents will issue a General Liability policy, which is entirely incorrect. Why? Because it doesn’t cover you for what you need (generally speaking… although you may also need this too if you rent or own real estate). Let’s take a look. General Liablity covers several things including the defense and settlement of accidents related to:

Premise Liability – This covers bodily injury that happens on the business premise (think a slip and fall).

Operations Liability – This covers things that happens within the operations of the business, like a painter dropping a bucket of paint on a passerby.

Products Liability – Think a manufacturer of a tool, constantly breaks injuring the user.

Completed Operations – For this one think faulty construction. You bought a home a couple of months ago, they contractor used a cracked board in a step and they step gives way and someone is injured.

Again, if you own real estate as a part of your business these things would be important, but it is designed to cover bodily injury that occurs. While some software can certainly cause bodily injury, generally speaking what these contracts are looking for is coverage financial loss because you don’t live up to the contract. This is known as a professional liability policy or a Tech E&O or Tech Malpractice policy. What does this cover?

Professional Liability – This covers the financial and consequential damages associated with your work. For example what if they client believes that you

  1. Failed to Perform as expected
  2. Made software that extremely Buggy because you were careless or just simply made errors
  3. Breached the contract or didn’t complete the project.
  4. Delay to start or delay in delivery

In these situations you’re a tech malpractice insurance policy would The defense costs associated protecting you from lawsuits as well as making the damaged party financial whole again.

Network and Security Privacy – This covers the financial and consequential damages associated with you being responsible for a data breach. This is not automatically added to the professional liability policy for those that are working on personal data.

Media Liability –This covers the financial and consequential damages associated with you being responsible for advertising or personal injury such as copyright and trademark infringement or defamation of a person or product disparagement. Like the network and security privacy coverage this can be added to the professional liability policy for those that are create content as a part of their IT contracts.

So, if you are asked to provide a certificate of insurance as a tech professional get what you need. That very well may mean you need a General Liability policy, but more likely what you need a proof of insurance stating you have tech malpractice. Start a quote for a tech malpractice insurance today!

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How a simple insurance policy can help you land more IT projects

Are you providing IT services as a side hustle? Or maybe you are a full fledge contract developer or web site designer. How do you set yourself apart? Of course, you have your portfolio or past projects, each done in a different language to show your versatility. But what about the business side? As crazy as it sounds, we see home builders, plumbers, and electricians, roofers and other construction professions tout the fact that they are licensed, bonded, insured. Why? Simple, they are trying to try to signal to the client that while they are willing to do the best work they can, they also want to cover the what ifs. What if the plumbing doesn’t work? What if they mess up etc., etc. They are signaling they have the contingencies covered.

Why don’t we see this in the tech world? Are you signaling that your contingencies are covered to your clients? Can you say you are Licensed, Bonded and Insured? Literally, probably not. I don’t know of licenses or bonds, but insurance does exist. Insurance against what? Your failure to perform as expected.

We know you are collecting requirements from all the stakeholders, defining scope, creating the work breakdown structure, and who of the stakeholders is responsible for what, right? You are documenting change requests and cautiously guard against scope creep, minimizing tech debt, and your code is clean as a whistle without any bugs, right? Your projects are on time, and under budget. If you are saying yes to every single one of these, you may be the world’s greatest developer. Each one of these areas introduces an element where things can go wrong.

Ultimately you are building something. Things can go wrong, and while it may not require that you tear out drywall and redo the wiring, The modification of code is a time consuming and costly process, and while insurance won’t cover this cost per se, these situations can make for some angry clients, who may be more inclined to sue because of the cost and time delays.

Ultimately what do you need coverage for? It depends on exactly what you are doing. If you are one of the many work-from-anywhere tech contractors you may not have need of a traditional generally liability policy, you don’t really have be concerned about a client slipping in falling in your place of business (or maybe you do), no you are more likely to be exposed to professional liability. Also known as Errors and Ommissions or Malpractice insurance. When hired you are expected to build systems that will be expected to perform to the agreed upon goal. When things go sideways, well you need Tech E&O coverage. So be as least as good as your local plumber, and start touting you are insured, you may be surprised at the difference it will make in your bids. Start your quote today online!

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What happens if your sweet tech gig goes sideways?

Question: What if that sweet gig you’ve got suddenly gets litigious? We have all seen the classic cartoons depicting what a nightmare communication can between a tech professional and the end client. From developers to website designers there is little question that clients have a hard time defining what their goals are, which make scope creep an inevitability. Combined, this means tech debt and bugs are a certainty, and the ever moving expectations mean you are fighting an uphill battle in your effort to perform your duties.

While contractual language that spell out the fact that bugs will happen, what if?

  • What if there is a catastrophic bug?
  • What if you unintentionally leave a back door?
  • What if you do nothing wrong, but the customer decides to sue anyway?
  • What if that sweet gig you’ve got goes south?

There are a million different reasons, but if you fail to perform up to their ever-moving expectations you could be sued. Even if you did nothing wrong, and did exactly what they wanted, are you protected? What’s the cost to proof you’re not liable? What’s the cost to settle the dispute? Legal fees are notoriously high, so how are you going to fund that?

Tech E&O or tech malpractice is a policy you can purchase to help you in this precise scenario. What do you get out of a Tech Malpractice policy? There are a couple of things.

  1. Legal Defense – If you get sued because of a failure to perform the stated work a tech malpractice policy will cover your legal defense. You get expert lawyers with 1 goal: protect you!
  2. So what happens if you are deemed to be liable, you now are on the hook for not having done something who pays? We do. That’s what tech malpractice coverage provides.

If you are a IT consultant, a developer, website designer or really anything in the tech space you’re worth protecting. Start your quote online today!

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