Some insurance companies exclude professional services on general liability policies for tech businesses. Why is that important?

Let’s say you’re a software developer. One use of your software is for navigational buoys on a lake. One day a recreational boat runs aground, injuring the people on-board, and it is alleged that the buoy failed to emit a proper signal because your software malfunctioned.

Is this covered under E&O policy? Bodily injury and property damage are specifically excluded from your E&O policy. Well what about your GL policy? Bodily injury and property damage are covered under the GL…that’s correct, but unfortunately, your general liability policy excludes coverage for bodily injury / property damage arising from software or programming.  

The claim is denied and you are left on your own to defend a claim that could easily reach seven figures. It’s sneaky exclusions like this that can make a huge difference.

It’s critical that your GL and E&O policies are seamless, and coverage gaps don’t leave room for significant exposures to come take down your business. A legal expert in your office might be able to analyze the various GL and E&O coverages to make sure there’s seamless insurance. If doesn’t work, I can help you with a free coverage review.

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