A major Australian insurer is aiming to remove the ambiguity surrounding combined professional indemnity and liability products that often plagues the IT sector.
Vero Insurance has developed iTech, a policy tailored to the IT sector combining professional indemnity insurance with public and products liability insurance, designed to cover the common risk exposures of the IT sector with a key focus on clear, user-friendly wording.
“Some policies that combine professional indemnity and liability have drafting issues that arise from extensions and exclusions only applying to one section and not the other,” says Vero Professional and Financial Risks National Manager Steven Lau.
“This can cause confusion in the scope of cover and defence of a claim.”
The product is applicable to a range of businesses in the sector, including product developers, manufacturers and suppliers, consultants and project managers, and data service providers. It is equally applicable to SMEs and larger businesses.
“Given how many businesses rely on their services and advice, IT contractors and developers have to protect themselves from honest mistakes and unforeseen circumstances. Brokers have an enormous role to play to help them find the right cover,” Lau says.
Risk exposures for these businesses include the loss of data, privacy and confidentiality breaches, system failures, intellectual property infringement claims, and injury or damage to third parties caused by faulty design.
“IT developers and service providers can face legal claims from their clients and third parties in a number of ways, such as unintentional breaches of privacy and consumer protection regulations, system crashes and data losses,” Lau says.
“The iTech product includes a provision to make advance payments of defence costs as they are incurred, even if the insured is accused of dishonest conduct.”
This cover will continue to advance defence costs until it is officially determined that the conduct was indeed dishonest.
“Furthermore, if a business has entered into a contract with their client that limits liability, or contains an indemnity or hold harmless agreement, this will not prejudice their cover,” he says.
Another of the iTech product’s key features is the provision of up to $500,000 to cover the costs associated with being involved in an investigation or inquiry.
“The big difference with this cover is that it is triggered when an insured is ‘requested’ to attend or produce documents for an investigation. Other wordings are only triggered when the insured is ‘legally compelled’ or ‘required’ to attend or produce documents,” Lau says.
The product also includes automatic cover for any contractors hired by an IT business, cover for certain product recall expenses, and cover for the cost of notifying individuals or organisations of privacy breaches.