IT Insurance

Claim Scenarios

Software designer

Claim Description - Our policyholder developed software to conduct risk modeling. A client purchased the software and relied on it to make financial decisions. Following the client’s financial collapse and bankruptcy, it sued our policyholder for providing inadequate software that it relied on in making decisions that led to its collapse.
Defense Costs - $1,084,390
Indemnity Costs - $3,810,000
Total Costs - $4,894,390

Claim Description - Our policyholder developed Web sites and e-business platforms. After our policyholder was hired to develop the client’s Web site, the client alleged that our policyholder failed to meet the required project milestones, misrepresented its capabilities and supplied personnel not capable of carrying out the project. In its defense, our policyholder contended that the client failed to identify what specific work it wanted done and repeatedly altered the project specifications.
Defense Costs - $1,549,866
Indemnity Costs - Jury trial resulted in verdict of $608,402 against the policyholder (excluding interest). Final damages are unknown as the case in on appeal.
Total Costs - At least $1,549,866

Claim Description - Our policyholder developed information technologies to manage an enterprise labor force and integrate with the client’s HR and payroll systems. Our policyholder fell behind in delivering the work, resulting in missed milestones and nonfunctioning project modules. Our policyholder contended that the client repeatedly changed the size and scope of the project. Ultimately, the client fired our policyholder and filed a lawsuit, seeking to recover the costs of hiring a new consultant and lost profits due to the disruption.
Defense Costs - $554,872
Indemnity Costs - $2,200,000
Total Costs - $2,754,872

Claim Description - Our policyholder’s client hired it to create an e-commerce Web site for trading and selling valuable collectibles. The client later alleged that our policyholder failed to deliver a working Web site and negligently recommended that the client purchase Web-enabling software from a company that abandoned the project and the software.
Defense Costs - $555,928
Indemnity Costs - $180,000
Total Costs - $735,928

Claim Description - Our policyholder was a software systems integrator. It contracted to install an integrated inventory control, purchasing and financial system for a client. When the client later engaged another contractor to add a human resources module to the system, the entire system failed because of incompatible software coding completed by our policyholder’s subcontractor. The client sued our policyholder, seeking to recover the costs of repairing the systems and lost profits due to the disruption.
Defense Costs - $222,074
Indemnity Costs - $550,000
Total Costs - $772,074