Business Insurance Technology 5 Ways Can Protect You From the High Cost of Lawsuits
When you run a small technology company, you try to make sure you do it right. But no matter how you check, check, and even triple check something, sometimes errors will go away.
Every business, especially a small business, faces risks. Sometimes it means being on receiving a complaint from an angry customer – which could mean a financial disaster for your business without the technology insurance policies in place.
When mistakes occur, lawsuits often follow
Let’s take a look at examples of how a client project can derail and a small IT company can be pursued.
Scenario # 1: You screw up. Michael Carroll (@InsuringLawyer), President of Insuring Lawyer, sets the scene:
Suppose you are a network administrator and you say to a customer, “Hey, I have to shut down your network, but do not worry, I’ll do it Friday night, and we’ll get it back on Monday.
But you do not get it back on Monday, and it’s a week and a half later that the network is finally operational.
If a customer loses a week and a half of work, it would do him a lot of harm.
Carroll says that a customer would have “every reason to take action” against you for reducing the network and putting them out of service for 10 days.
Scenario # 2: Your client is injured. Here’s how it could play:
Your business is hired to create an app for a small chain of restaurants that allows customers to order and pay before they get to the restaurant.
The client does not respond with the approvals needed to make things happen. You are now well behind, but the customer is asking you to deliver the app to the original date.
Without extra time for testing and bug fixes, the app is not quite ready for launch. Users have difficulty processing their food orders in the app and detonating your client on social media.
Although the project lead time is due to the customer’s lack of response, they immediately sued you for delivering a faulty application.
When it comes to lawsuits, even a victory can feel like a loss
In the first scenario, you knew that the lawsuit was probably coming. You messed up – big time. But in the second scenario, you can not believe that your customer is pursuing. Your contract explicitly stipulated the time required, which was necessary on the customer’s side to move the project forward, and how any delay on the end of the customer would result in a delayed launch. You have written everything. It’s not your fault – it’s theirs!
“There is no surefire way to avoid a lawsuit because, unfortunately, people can sue for any reason or no reason,” says Nina Kaufman (@NinaKaufman), lawyer and strategist at Ask the Business. Lawyer.
Trial costs can add up – quickly. Just for beginners, you might watch:
The lawyer’s fees.
The costs of justice
Expenditure of expert witnesses.
Missed work time.
Regulations or judgments.
As a small IT business owner, in addition to pointing and crossing, the best way to protect yourself from the threat of a lawsuit is to make sure you have good IT business insurance.
Meet the Technology Business Insurance dream team
Even with adequate prevention, you can not protect your IT business from all risks. You can make sure you have a layer of protection against prosecution. This is where IT insurance can help, with policies such as …
General Liability Insurance. This policy can guard against many common office problems, such as fraudulent claims. It’s a solid foundation for protecting you against accidents, injuries and property damage caused by others.
Policy of the business owner. BOP Insurance combines general liability insurance with commercial property insurance into a single policy, normally at a lower rate than if you buy them separately. This is usually only an option for companies in low-risk industries, such as IT. Enjoy premium savings and buy the bundle!
Professional liability insurance. Also known as Errors and Omissions Insurance Technology, this coverage occurs if your company faces a lawsuit over an error or mistake.