The importance of good risk management shouldn’t be underestimated. Dealing with a professional indemnity claim can be costly and time consuming and most insurers will require you to be actively involved in the process. If a claim goes to mediation or trial you could be looking at hundreds of working hours being lost.
There are many factors for IT professionals to consider when improving risk management but here are some key suggestions for reducing your exposure to professional indemnity claims.
1. Understand the needs of your client by conducting a detailed scoping exercise (ideally before an exchange of contracts takes place).
2. Do not oversell the goods and/or services you are offering. Claims often arise on the basis that systems/software supplied do not meet the expectations of the client.
3. If a project is evolving during implementation (known as “scope creep”) make sure that there are effective change controls in place.
4. Ensure that the client is kept advised of the full costs of a project or implementation. It is not uncommon for disputes to arise when costs are significantly higher than anticipated.
5. Avoid copying material without permission and ensure that the ownership of source codes is clearly defined. If, for example, you are carrying out a bespoke software development project for a client, clarify which party will retain ownership of the source codes.
6. Use caution when managing or migrating data belonging to a client. Ensure that data is backed up and that any data you hold is secure with appropriate firewalls and password protection.
7. Make sure that your professional indemnity policy is adequate for your needs. Is the policy limit sufficient for the size and value of contracts you are entering into? Are there territorial limits on the policy? Has the type of work you are carrying out been clearly explained to your insurers?
Bluefin is one of the UK’s leading independent insurance brokers, providing specialist insurance and risk management services to individuals and businesses. It provides market leading insurance solutions delivered locally through a network of 42 offices and over 1400 staff.
As a top ten independent UK insurance broker, Bluefin provides specialist advice across all classes of business including property, employers liability, public and products liability, professional indemnity, contractors all risks, motor and engineering. Bluefin also underwrites on a wholesale basis for a wide range of products and schemes. Bluefin is proud to have been awarded Chartered Insurance Brokers status by the Chartered Insurance Institute in 2012.Follow @Alltopstartups