In an increasingly litigious society, more and more individuals and businesses are looking for accountability for the adverse consequences they experience as a result of services delivered to them. As this trend continues, there is a need for IT professionals to ensure they have adequate insurance to protect against a claim.

Best business practice is leading the way towards IT professionals realising the value of having Professional Indemnity insurance. Many firms now only employ the services of IT professionals who carry Professional Indemnity insurance.

Contrary to popular belief, most standard public liability policies do not cover the liability for advisers causing financial losses as a result of an error or omission or bad advice.

Case study

An IT consultant was part of a consortium that won a large contract. The consultant took the precaution of obtaining professional indemnity insurance which stipulated that cover would not start until after sign off. The consultant finished his part of the contract two years before the main contract ran into problems. A claim was made against the consultant before final sign off had occured, as a result of which the consultant was not covered!

This problem could have been avoided by making sure that the insurance cover was adequate for the project. It is unlikely that this type of policy would ever be suitable for large projects. In our experience, the majority of IT projects that result in dispute will fail or run into dispute before the project is signed off. Our policy therefore provides cover for claims at any stage of the project.