When it comes to the professional world, there are a lot of risks to take into account and consider. Most of those risks come from the possibility of making some kind of mistake within your professional vocation. While there are some mistakes that are smaller and don’t bear as much weight as others, there are times when professionals can be accused of mistakes that harm others.
Because of this, it’s not uncommon for there to be specific kinds of insurance that help to protect the professional in question, should an allegation that leads to a lawsuit arise against them. For example, physicians never operate their licenses in any situation without some kind of malpractice insurance. This isn’t because they plan on committing malpractice that harms anyone, that would be intentionally criminal, however, the fact remains that mistakes can happen. In the case that a physician does make an error that causes harm to an individual or family, malpractice insurance helps to protect that physican from possible financial peril due to a lawsuit.
In the corporate world and the non-profit sector, board member executives rarely will operate without D&O insurance that financially protects them in the case of a lawsuit. This kind of insurance is common across many fields of practice, and EO insurance helps to protect professionals in the technology industry.
EO insurance stands for Errors & Omissions insurance and can be used by anyone that works in the technology industry, specifically those working with data or finances. This kind of insurance helps professionals that may be faced with allegations of mistakes that have caused harm. Typically the lawsuits that arise because of these allegations deal with clients who feel the professionals in question made errors that resulted in financial loss.
Tech EO insurance is specifically for any kind of company or individual that works in the cutting-edge field of technology. If a company deals with data of any kind, it’s highly suggested that this kind of insurance is acquired. This is by nature a very broad category, and the insurance itself does cover a plethora of different kinds of services.
For instance, this kind of insurance can help protect professional website developers, as well as help, protect a startup SaaS company. Essentially, with any kind of technology-related job, there is always a chance of error or something going wrong. In the case that a client feels that a service is to blame for any acquired loss, they can sue for damages. While there are some tech-related fields that are new and less established, there essentially is no company that deals with technology that is not highly encouraged to acquire this insurance coverage.
Common company types that are encouraged to never operate without EO insurance would be:
- IT contractors
- Technology startups and SaaS providers
- Ecommerce companies
- Software developers
No matter the size of your company, whether a startup or an established brand, tech EO insurance helps cover legitimate lawsuits that could result in very costly damages. This isn’t just an insurance coverage for young companies that may not be able to financially sustain damages from a lawsuit, this is also a way of showing your potential clients that you are serious about the products and services that you offer.
The two most common things that tech EO insurance covers are contractural liability and professional negligence.
Often times a tech company will work for clients under a contract that outlines specific outcomes that are expected. In some cases, however, the terms of those contracts are not met to the satisfaction of the customer. In these cases, if the customer or client can prove in a court of law that they sustained some kind of loss or damage due to the contract not being satisfied, the tech company can be found liable.
This kind of insurance helps to protect companies of all sizes from this kind of unfortunate situation.
In the tech world, it’s not uncommon for things to just simply go wrong. Software developers may put of software in testing and beta for months, only for a client to have specific factors affect the use of the software and damage their computers. This insurance helps protect companies from professional negligence if their products cause any kind of loss or damage.
As is the case with all kinds of professional insurance, the point of tech EO insurance is not to help protect against gross negligence or incompetence. In order to attain this kind of insurance, there typically has to be proof that a company is doing their do-diligence and has structured contingency plans in place to help mitigate these situations. Companies that want to protect themselves in the tech world, should seriously consider this insurance before operating in any kind of way.