Professional liability insurance, A.K.A. errors and omissions (E&O) insurance, is an insurance coverage that protects your company against claims brought by a customer who alleges they suffered financial loss due to the professional design (software or hardware) services you provided. This type of coverage protects you from unintentional mistakes (errors or omissions).
Technology-based companies who perform software or hardware design services should carry this type of insurance as more traditional general liability insurance coverage may not cover situations in which the process of invention and related development services are included in the engagement.
Limiting your professional liability related costs has primarily two focuses, premium management and claims mitigation/avoidance.
In summary, where design services are offered (software or hardware), professional liability insurance is a valuable protection that should be included in your portfolio of insurance coverages. Careful evaluation of the type of coverage, your sensitivity to assumed risk and the defense of your good business practices are important in helping you control the costs of this important protection.
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Ball Systems designs, develops, and delivers custom test systems and produces comprehensive build-to-print systems for companies creating or manufacturing critical electronic or electro-mechanical components for automotive, aerospace and defense and consumer appliance applications.