TIRA 2015: Tech Industry Risk Assessment
Part 2: Seven Areas to Focus on for Better Security and Risk Management

2. Complaint Resolution Policies

We mentioned above that checking in on the progress of projects is a great way to avoid last-minute disasters and client complaints or disputes. But sometimes, despite your best efforts, clients will be unhappy. When that happens, it's crucial to have a plan for resolving the conflict to prevent lawsuits.

Icon - Complaint Resolution


Think of it this way: client lawsuits can have the financial effect of a major robbery on your business. If a project management audit is the lock on your door, a complaint resolution policy is the burglar alarm. It kicks in once something has gone wrong and is a last line of defense to prevent the lawsuit.

Currently, while 83 percent of insureon customers say they work diligently to resolve client complaints in a timely fashion, only 47 percent have written client complaint resolution policies in place. This isn't surprising, given that most of our customers are the only person in their business. But as with project management procedures, written policies are worth having and can be done simply. For example, a single-page client complaint resolution policy might look like this:

  1. Acknowledge and document complaint
  2. Investigate complaint
  3. Resolve complaint
  4. Communicate resolution to customer
  5. Follow up with customer

Sounds simple, right? Unfortunately, when a customer is angry (especially if they're in the wrong), it can be difficult to address the problem head on. It may be tempting to take the path of least resistance and ignore the problem or do the thing that's satisfying in the short term and tell the customer off.

But as Robert Covington reminds us, "ensuring that customer issues are resolved is critical to maintaining reference-able customers, and… some formal means of tracking can help to ensure that no complaints fall through the cracks."

In other words: you'd better have a system, or you can forget about those references.

Why Might The Customers Be Angry?

Of course, nearly anything can go wrong during the course of a client relationship. But one thing that's almost guaranteed to upset customers is failing to protect their personal data, either by enabling a data breach, failing to prevent a breach, or recommending a vendor or service provider that ultimately gets breached. Below is a snapshot in pie charts of the ways our clients handle customer data.

Of the 8,651 customers who were directly asked about customer data, 25 percent noted that they were “responsible” for customer data and 19 percent said they set customers up with third-party providers that host their data. Further, 12 percent store customer data and 3 percent admit to sharing it with others. Slicing those numbers conservatively, that means that at least a quarter – and possibly more than half – of IT business owners applying for coverage with us could have cyber liability in the event of a data breach. Yikes.

For those that are directly responsible for data, Cyber Liability Insurance could handle the costs associated with recovering from a breach. For the others, Errors & Omissions Insurance would likely cover the legal costs if the customer sued over the recommendation.

How Do You Interact with Customer Data?

To-do item: Create a one-page process for handling and resolving customer complaints (e.g., using the five questions above).

Risks managed: Customer lawsuits.

Next: 3. Contracts

Grab-n-Go Information

IT Contracts eBook
Get It in Writing: The IT Professional's Guide to Essential Contracts
Browse eBook
Sample certificates
See a sample Certificate of Liability Insurance, the proof of coverage you need for most contracts.
View Sample
Sample Quotes & Cost Estimates
See what insurance really costs: actual quotes by policy & specialty.
Get Estimates
Ask A Question
Submit your questions about construction insurance and get answers from our experts.
Read Answers