IT Contractor Insurance
We recently wrote about Professional Liability being an important component of IT Contractor Insurance strategy. Our Agency in San Jose, CA works with many different carriers to ensure we place the appropriate coverage for a client but in this article, we want to highlight an excellent Professional Liability program form Traveler’s for high-tech companies – CyberFirst® Technology Errors and Omissions Liability Protection. Many of our technology clients have selected this program for their IT Contractor Insurance.
Technology companies are unique in their exposures, so it is important to have coverage protection that understands the nature of the business and exposure to risk. A typical Commercial General Liability policy does not cover claims or suits for economic loss caused by an error, omission or negligent act. In San Jose, CA with Travelers E&O coverage, the bottom line is protected against damages that must be paid because of an economic loss resulting from the products or work which are caused by an error, omission or negligent act.
Why be vulnerable to a loss that could destroy the business and the owner’s livelihood? As a technology company located in San Jose, CA, Travelers knows the business owner is at the forefront taking risks daily as they innovate in this fast-paced world.
Technology companies are all about the cutting-edge performance. To stay there, they need cutting-edge protection too.
“It won’t happen to me.”
Even the best, most conscientious businesses face E&O related claims and lawsuits. The following claim scenarios are representative of some of the E&O risks faced by technology businesses.
1. In San Jose, CA, You’ve developed office management software to integrate with a client’s HR and payroll system. You fell behind in delivering the work, resulting in missed milestones and non-functioning modules. You contend that the client repeatedly changed the size and scope of the project. Ultimately, the client fires you and files a lawsuit seeking to recover lost profits and extra expenses due to the disruption.
2. Your client hired you in San Jose, CA, to create an e-commerce website for trading and selling valuable collectibles. The client later alleged that you failed to deliver a working website and negligently recommended that the client purchase Web-enabling software from a company that abandoned the project and the software. They sue you for lost expenses and lost business opportunities.
3. You design a radio unit that is integrated into a wireless local loop telephone system. Contractors install a capacitor backwards into your radio unit as a result of an error in your schematics, causing a failure to occur. A large number of units were installed by the time the problem is discovered. Your client asserts a claim seeking to recover damages resulting from the failures.
Here are some of the highlights for this IT Contractor Insurance program:
• Coverage for both compensatory damages imposed by law and consequential damages for breach of contract or agreement to provide your products or perform your work for others.
• Duty to defend claims or suits seeking damages and suits seeking injunctive relief.
• Coverage provided on a claims made and reported basis, with a 90-day limited reporting period applying automatically at the end of each policy and an unlimited extended reporting period available for purchase.
• An expanded list of protected persons that includes:
• Others you must insure under your policy as required by your written contracts.
• Your unnamed subsidiaries.
• Your newly acquired or formed organizations of which you own more than 50 percent. Automatic coverage is provided for these organizations for up to 90 days, even for wrongful acts committed before your acquisition but after your policy’s retroactive date.
• Employees, including permanent and temporary leased workers.
• Limits of coverage available up to $5 million per wrongful act and total limit.
• Variable deductibles starting at $5,000.
• Coverage provided on an Admitted basis.
• Worldwide coverage, included in CyberFirst E&O.
If you’re an IT Contractor or Consultant and currently don’t carry Professional Liability, contact us for pricing on a Professional Liability program which is taylored to meet the needs of your business as well as your IT Contractor Insurance and Risk Management strategy.
Contact John at Brauer Insurance Services – 3150 Almaden Expressway, Suite 203, San Jose, CA 95118 – 408-406-9458