Can I get sued for that?

image courtesy of Flickr user steakpinballThe other week I talked about how “forgetting” to renew your domain name was actually a rather common mistake, however inexplicable that may seem.  Imagine… losing your website’s entire identity because you forgot?

Even worse, what if you failed to renew a domain for a client when that was a part of your agreement and services to them?  What would the fallout be for that? How much would a web development firm be liable for in this type of scenario?

These are questions a buddy of mine posed after reading my post.

Jokingly, my response to him was, Well… that’s what insurance is for.

But all joking aside, this got me thinking—

What would your small web development shop do if it got sued for something like forgetting to renew a domain name, or even something larger in scale like a security hole in your application that allowed hackers to steal data from your client or your client’s own customers?

For brick-and-mortar operations, and the large investment involved with them, acquiring adequate business insurance is more of an in-your-face consideration.   People slip and fall.  People spill hot coffee on themselves.  There’s a physicality involved.

But what about the one or two person web design shop?  Or the freelancer working out of his or her bedroom and providing a digital service from a remote location?

Well, if this is you, and you haven’t given this idea much of a thought before now, here’s a few examples of some very real liability claims that tech firms of all sizes should consider finding coverage for:

Intellectual Property Infringement

Example: A competitor accuses you of infringing upon the copyright of their own product(s) or trademark.

Errors and Omissions (E&O)

Example: A client accuses you of negligence or failure to perform (e.g. you failed to renew a client’s domain name; a client is not happy with the performance of your application and alleges a functionality failure, etc.)

Security Breach/Unauthorized Access

Example:  You performed maintenance on a customer website without re-enabling some backend security features upon completion.  As a result, secure sections of the website are left vulnerable and eventually exploited.

Introduction of Malicious Code

Example:  When uploading a new application for a customer, a malicious code is inadvertently transferred to the customer’s network, causing widespread loss of data and disruption to the customer’s operations.

______

These are just a few scenarios to consider.  To get a better idea of what your particular business needs are, the best thing to do is to contact your trusted insurance provider.  It can’t hurt to just get a quote.  This is your business we’re talking about.

If you’re interested in learning about Newtek’s suite of professional liability policies, designed for small and mid-sized technology companies, feel free to contact us at any time, or shoot us an email at community@crystaltech.com, and we’ll have one of our reps give you a call.

Let us know what you think.  Do you feel that this type of coverage is important to have?

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