Professional Liability of the IT Contractor
IT Contractors carry a professional liability at law. As an Independent Contractor, you are required to perform your duties to a reasonable level of care and skill, considered as ‘standard’ by your profession.
Litigation can arise from an actual or alleged failure to fulfil these standards of performance which cause a third party to suffer a loss.
Contracting via Clicks IT Recruitment (or any other third party) does not reduce or eliminate your liability at law to perform your duty of care to third parties.
You remain exposed to personal litigation or to be joined into litigation as you are not an employee of Clicks.
This is why it is essential that all IT Contractors maintain appropriate insurance cover for their professional liabilities.
The Clicks’ Solution = Automatic IT Liability Insurance for all IT Contractors
When you provide your services via Clicks as an individual (we call this a PAYG contractor) you are automatically covered for the services supplied for and on behalf of Clicks. When you provide your services through a legal entity/company (we call this an ABN contractor), we require your entity to have the appropriate level of cover. This can be very expensive, discouraging contractors from taking the required level of cover and substantially increasing their business risk.
In conjunction with its insurance advisor, Clicks has developed a form of cover that will improve the level of cover you can access, reduce your cost and increase your flexibility.
The Clicks’ Liability policy provides a combined package of both Professional Indemnity (PI) and Public/Products Liability (PL) cover. The policy has been specifically designed to cater for IT Professionals by acknowledging the blurred line between products and services in the IT Industry – for example, when is customising software for a client a service and when does it become a product?
By combining both covers there is no ambiguity as to the nature of a potential dispute between your PI and PL Liability insurers.
The Professional Indemnity (PI) section of the Clicks insurance package covers you for any civil liability arising out of your professional service or advice. This can include but is not limited to:
- Acts, errors or omissions you make;
- Allegations of breaching the Trade Practices Act;
- Loss of documents or data; and
- Intellectual property disputes.
The cover provides insurance for the third party’s damages, costs and expenses. It also provides legal defence and investigation costs cover. It is important to note that these policies are designed to protect the insured against any alleged civil liability. What this means practically speaking is that even if you have done nothing wrong a disgruntled client can still attempt to sue you and in turn your Insurer will still protect you on the basis of this allegation, even if it means appointing lawyers to simply dismiss the potential claim.
The Public and Products Liability (PL) section of a policy provides cover for personal injury and property damage caused by you or by your product which can include goods you have supplied or assembled on-site. Electronic data loss can be a significant exposure for some IT Contractors.
Why is the Clicks’ Liability insurance solution a superior solution for you ?
- It offers the broadest cover available in the market.
- You have $20m cover for Professional Indemnity and $20m for Public and Products Liability ($10,000 excess on combined policy).
- You are only charged while you are working on assignment for Clicks. Whilst you are not on assignment (you are on leave or you are in between assignments) the cover continues but you do not pay! A standard policy purchased individually requires up front payment for a 12 month policy which cannot be suspended in between assignments.
- You have ongoing cover for all past work you do via Clicks. A standard market policy only provides cover while you keep paying and renewing the cover. The Clicks IT Liability Insurance policy has ‘built in run off cover’ which means peace of mind for you should you be legally tied into a dispute at any stage in the future for past work done.
- Price competitive – the cost of the cover is very economical compared to having to purchase this sort/level of cover in the insurance market.
A large firm engaged It Contractors for a software upgrade,which did not meet expectations. While the project cost was only around $200,000 the client sought over $2m in loss due to lost business.
While performing hardware services, an IT contractor failed to insert a backup tape properly. There was a blackout and because the backup failed one day of data was lost.
A client without IT knowledge engaged a software developer to provide a solution for recording estimates and producing invoices. The hardware and software supplied failed to provide these capabilities and the developer was alleged to have engaged in misleading and deceptive conduct.
A reseller was sued by numerous customers after providing misleading and inadequate advice as to the service, functionality and coverage of various IT and telecommunications products.
When undertaking work outside of Clicks IT Recruitment Assignments
Feel free to contact Austbrokers Countrywide for discounted insurance cover for IT work done outside Clicks assignments. The pricing will take into consideration work done via Clicks and the protection you already have under that policy to ensure you obtain discounted insurance for any other work requiring insurance cover.
Greg Hansen – firstname.lastname@example.org
Ph 03 9835 1310
Allie Dobiecka – email@example.com
Ph: 03 9835 1376
Contact your Contractor Care Consultant