If your technology company is sued for damages caused by technical errors, omissions, or negligent acts of your products or services, commercial liability insurance would not be sufficient to cover the costs. You will need technical errors and omissions insurance coverage for these claims and lawsuits. Even then, your protection may fail. There are certain risks that your insurer may not cover, which your business may experience particular difficulties with. That’s why it’s crucial to choose adequate coverage for your business when purchasing technical E&O insurance. Here are four criteria to help you choose the errors and omissions insurance coverage you may need.
Enterprise-wide coverage for your technology business can be important if your company frequently releases new products and newer versions of older ones. If you have a general technology E&O policy, you may not be covered for any products and services released after the last renewal of your policy. Enterprise-wide coverage will cover both existing products and any future products or services.
Breach of contract & negligence
If you have a general E&O policy, you only have coverage for either negligence/tort claims or breach of contract, not both at the same time. As a result, your insurance will not protect you if a claim is made for breach of contract and damages, and your company will be responsible for paying litigation. Therefore, it is important to have comprehensive coverage for such cases to protect your business in all possible scenarios.
Delay Exclusion in E&O Policy
Delayed delivery of your product or service may result in a lawsuit for failure to deliver on time. An unexpected event that delays the delivery of your products can result in a loss for businesses working under a tight deadline. Delay exclusions in general E&O policies may not be helpful in these circumstances. To prevent such lawsuits, your E&O policy must cover delays in coverage.
Software copyright infringement
If copyrighted software code is integrated into one of your products due to an error in your code, you may be sued for infringement by the software owner. Your customers who are sued by the copyright holder of the software code that is integrated may also claim against you for any financial losses resulting from the suit. Depending on your insurer, software copyright infringement exposure may or may not be covered by your E&O policy. When purchasing E&O insurance, look for that coverage.
Getting adequate coverage to be prepared for all possible scenarios in the future is critical to the smooth running of any technology company. And getting the right coverage to protect your business from potential claims and lawsuits can be inexpensive.
Do you need errors and omissions insurance? Contact Abbate Insurance!
Contact our team of experts here at Abbate Insurance Associates, Inc. to learn more about errors and omissions insurance. Our professionals can help you achieve the best and most affordable coverage options for all your business needs.