Professional Liability

Crime BondsIf you are a real geek, then the chances are good that you are here because you need professional liability insurance. Perhaps a banker or a customer has decided that this is an imperative requirement for you to do business. Perhaps you have decided that you wish to protect all of your hard work and future earnings. The truth is, if you are in a technology related field, professional liability is a must have whether required by a third party or not.

Whether you give advice as a consultant, implement a solution as a service provider, or even staff projects with your employees at someone else’s workplace, you can do financial damage. While general liability insurance protects you against third party claims as a result of bodily injury and property damage, professional liability insurance protects you from third party claims due to a financial loss. Professional liability insurance may also respond to cover claims that you “failed to perform” or the product/service you sold had an “error or omission” and subsequently caused a financial loss. Professional liability is such a specialized product that nearly every claim that would be covered under a professional liability insurance policy is excluded from a standard general liability policy.

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Do any of these scenarios sound familiar?

  •  A client hires a software company to develop a software system for their business.  As is typically the case, the two parties sign a client services agreement that contains very specific benchmarks in an effort to get the project completed on time.  Over the next several months, the benchmark’s a not reached.  The client alleges that it’s due to the software constultant’s negligence.  As a result, the software company is sued by the client “loss of profit”.  In the legal proceeding, they claim that the software company was negligent, in breach of contract, and misrepresented themselves in an effort to gain their business.
  • Your firm is hired to assist a company in migrating data from its current state to a web-based system.  During the migration, a database is compromised.  As a result, valuable information has been lost.
  • 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 failures to occur at a certain temperature. Between 12,000 and 14,000 units are installed by the time the problem is discovered. Your client asserts a claim seeking to recover damages resulting from the failures.
  • You develop enterprise labor force software to integrate with a client’s HR and payroll systems. You fall behind in delivering the work, resulting in missed milestones and nonfunctioning project 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 due to the disruption.
  • Your employee inadvertently downloads a destructive computer virus that spreads to other files housed on your computer network. Your client downloads information from your website, allowing the virus to spread to the client’s computer system and resulting in widespread loss of data and a computer network shutdown. Your client sues you, contending you should have prevented transmission of the virus. The client seeks damages for the lost data and economic loss caused by the network shutdown.
  • Your employee’s company laptop is stolen from his home. The laptop contains private financial information of your customers. Your customers sue you for damages resulting from your failure to protect their private financial information.

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12 Things You Need to Know About Professional Liability

12 Things You Need to Know About Professional Liability

What You Need to Know About the Hammer Clause

Everything You Need to Know About the Hammer Clause

The Importance of Financials in Professional Liability Underwriting

The Importance of Financials in Professional Liability Underwriting

CRIME BONDS | ELECTRONIC DATA PROCESSING | GENERAL LIABILITY | MANAGEMENT LIABILITY | PRODUCT LIABILITY | PRODUCT RECALL | PROFESSIONAL LIABILITY | WORKERS COMPENSATION