E&O Further Reading
Top Technology Errors and Omissions Exposures

Nearly 95 percent of IT businesses that come to us are looking for information about technology Errors and Omissions Insurance. E&O Insurance can pay for lawsuits when clients allege you…

  • Were professionally negligent.
  • Provided shoddy, incomplete, or incorrect work.
  • Recommended technology that wasn't up to the task.

Between data breaches, security incidents, scope issues, and miscommunications with clients, you're right to be concerned about E&O risk. An IT consultant can face security snafus that could lead to an expensive professional liability lawsuit.

With E&O concerns so prevalent among IT contractors and tech professionals, let's take a look at five of your biggest E&O liabilities and actions you can take to protect your business.

5 E&O Exposures IT Professionals Need to Know

Whether you're a tech contractor or you run an IT company with dozens of employees, your business will need to have a plan to reduce its E&O risk exposure. Here are five IT professional liability risks and tips to help you minimize them:

#1: Miscommunication with clients.

Miscommunication with clients.

As an IT consultant, you know how difficult it can be to explain your tech to a client. Some clients may be particularly stubborn and refuse to understand that a piece of technology only does certain things and won't handle all their needs in one fell swoop. For this reason, it's crucial that you communicate well with clients and explain clearly what your IT will and will not do.

#2: Scope problems.

Scope problems.

As you work on a project for a client, the size of the project may grow. This can lead to disputes about the "scope" of a project and what is and isn't included in your contract. Be transparent with clients if you think they're asking you to do work that wasn't originally outlined in your contract and renegotiate your fees, if necessary.

#3: Client misuse of technology.

Client misuse of technology.

As strange as it may seem, you can be sued if your clients misuse the technology you set up for them. For instance, if you install software — but don't educate clients about proper settings for use, you could be liable if their security is breached. Set clients up with the right IT, but make sure they know how to use it securely.

#4: Missing deadlines.

Missing deadlines.

Any IT project manager knows the importance of meeting deadlines, which can be difficult when you're dealing with a lot of moving parts. If a subcontractor causes a delay, you could be blamed as PM. If it's looking like a project may be finished late, give clients a heads up so the delay won't come out of the blue. For long, complicated projects, consider breaking the contract into milestones; this will ensure you're paid for each step along the way and help you — and your clients — stay on the same schedule.

#5: Recommended software gone wrong.

Recommending software that doesn't work / gets breached.

Even if you don't write a piece of software, you can be sued if it doesn't work right. These liabilities include data breaches, as well as run-of-the-mill IT problems like latency, compatibility, and data loss.

Check out Cutting Risk on the Cutting Edge for more IT risk management tips.

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