Potentially.

Software failure or downtime is not automatically covered simply because an IT Liability policy is in place.

The policy may become relevant where a client alleges that an error, omission or failure in insured technology products or services caused financial loss.

Examples can include:

• Coding errors
• Incorrect system configuration
• Failed implementation
• Failed data migration
• An update causing system unavailability
• Failure to restore services within an agreed timeframe
• Incorrect advice about capacity or compatibility

A client may allege losses such as:

• Lost revenue
• Additional operating costs
• Rectification costs
• Costs of engaging another provider
• Other consequential financial loss

Whether the policy responds depends on the allegations, cause of the failure and policy wording.

Contractual obligations such as warranties, service credits, penalties or performance guarantees can also affect the position.

Downtime caused by a cyber incident may instead involve Cyber Insurance, particularly where the insured business’s own systems are affected.

Contact our team if you would like us to review your software, system and contractual exposures.