Common Tech E&O Exposures 

What are the risks?

Unlike traditional professions, technology companies do not always provide advice for a fee. Rather, they most often supply deliverables under a written contract with their client. It is a breach of this written contract that is the primary cause of claims against companies in this sector. Understanding these risks and exposures is the first step in helping mitigate exposure to claims. Below is a list of some of the most common areas of exposure that are faced by corporations. 

Breach of warranty to meet a written specification

A breach of warranty claim is related to expectations for the performance of your product/service that was not met. Defending your company against this type of claim is often a very long and costly process.

Breach of a written contract to design or supply deliverables

This is a particularly critical risk for technology companies as the most common way that companies deliver technology products/services is by the way of a written contract. For many reasons, an organization may be unable to provide the service outlined within their contract which can lead to substantial financial harm for the buyer. If this contract is proved to be void, the buyer may bring their concern forward with a claim.

an allegation of negligence

In the technology industry, claims of negligence often arise from a company’s failure to act with a level of care that properly protects the integrity of the product. Oftentimes, these mistakes include coding errors that can lead to defects in your product or service.

Breach of an implied statutory term

Claims of this nature are brought forward when a company fails to include or clearly state an item within their contract that the court deems necessary.