If your tech company is sued for damages brought on by any technological errors, omissions, or negligent acts on the part of your products or services, commercial liability insurance would not be sufficient to help cover the costs. You will need technology errors and omissions insurance coverage for these claims and lawsuits. Even then, though, your protection might fall short. There are some risks that your insurer might not cover, with which your business may experience particular difficulties. Therefore, choosing an adequate amount of coverage for your business is crucial when buying tech E&O insurance. Here are four criteria to help you select the errors & omissions insurance coverages you might require.
Enterprise-wide coverage for your tech business may be important if your company frequently releases new products and newer versions of older. If you have general technology E&O insurance, you might 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 will only have coverage for either negligence/tort claims or contract breaches, not both at the same time. As a result, your policy will not protect you if a claim is made for breach of contract and tort, and your company will be responsible for paying litigation. Therefore, having comprehensive coverage for such instances is essential to protecting your business in all possible scenarios.
Delay Exclusions in E&O Policy
Delayed delivery of your product or service may result in a lawsuit for failure to deliver on time. An unanticipated event delaying the delivery of your products could result in a loss for businesses operating under a strict deadline. Delay exclusions in general E&O policies may not be helpful in these circumstances. To help prevent such lawsuits, your E&O policy must cover delays in the coverage.
Software Copyright Infringement
If a copyrighted software code integrates into one of your products due to an error in your code, you may be filed for an infringement lawsuit by the software owner. Your clients who are sued by the copyright holder of the software code that is integrated may also make a claim against you for any monetary losses resulting from the lawsuit. Depending on your insurer, software copyright infringement exposure may or may not be covered by your E&O policy. When purchasing an E&O insurance policy, look for that coverage.
Getting adequate coverage to be prepared for all possible scenarios in the future is essential to the smooth functioning of any tech company. And getting the right coverage to protect your company from potential claims and lawsuits can be cheap.
Need Errors and Omissions Insurance? Contact Abbate Insurance!
Contact our team of experts here at Abbate Insurance Associates, Inc. to find out more about errors & omissions insurance. Our professionals can help you attain the best and most affordable coverage options for all your business needs.