By Toby Levy, Vice President, Technology
Nausea, motion sickness, and headaches were not exactly the user experiences that Apple was anticipating when it introduced the new iOS 7 operating system. Yet, that’s what happened when the system’s “zooming” feature caused some users to feel ill while navigating between apps.
It is not the first time software has been suspected of causing an illness or other bodily injury. Think back to the allegation in 2007 that a four-year-old sustained permanent injury after a seizure induced by a Sony Playstation video game. Strava, a GPS athlete-tracking app developer, was sued in 2012 for allegedly causing a cyclist’s death. Though the case was dismissed, Strava still faced legal costs to answer the suit.
Owners of software companies, including computer consultants, system integrators, programmers and software package developers, are vulnerable to bodily injury suits. Agents focused on the Technology industry should help clients understand that:
- Software use could result in unintended consequences, which may result in bodily injury and, possibly, a lawsuit.
- An allegation of bodily injury due to software, even later disproved, will still be expensive to defend.
- Standard general liability policies often do not cover tech companies for bodily injury resulting from their software, programming or other services.
- Insurance carriers that specialize in insuring technology companies should be able to provide this coverage — although it is important to double check because even carriers that purport to focus on technology insurance are inconsistent in the way that they address this risk.
Eliminate coverage gaps
Technology clients often require more complex solutions to close coverage gaps than many other types of businesses, but convincing Tech companies that they may need to modify coverage, sometimes at an additional cost, to protect their business can be challenging. Here’s how to change the conversation:
- Clarify bodilyinjury. Help clients to understand what a bodily injury claim is and how their current general liability policy may or may not respond. Relate the Apple case or another real life example to their business and their exposures. While most standard policies exclude bodily injury caused by software from general liability coverage, The Hanover’s business liability policy and commercial general liability for tech companies does not exclude bodily injury and property damage arising from professional services.
- Differentiate general liability from errors and omissions coverage. Clients may not understand that while an errors and omissions (E&O) policy provides protection for economic damages arising from professional services, such as software development, typically E&O policies will not cover Bodily Injury or property damage caused by software or other technology professional services. Be wary of situations where carriers are endorsing the E&O to fill this gap as the coverage is not comparable to that provided by the general liability policy — it is claims-made and defense within limit compared to general liability, which is occurrence based and defense outside the limits.
Educating tech clients about the potential financial harm that can arise from coverage gaps is key. No matter the company size, Tech businesses will need proper liability protection through coordinated general liability and professional liability solutions.