Type of Claim:
Errors & Omissions (E&O)
Cause of Action:
Negligence/Failure to Perform
Type of Insured:
Software Developer
Situation:
A software company manufactures and distributes software used by businesses to conduct risk modeling. A customer purchases the software and relies on it for making financial decisions.
Challenge:
Following the customer’s financial collapse and subsequent bankruptcy, they sue the software developer for providing inadequate software that they relied on in making decisions that led to their collapse.
Resolution:
- Claim Expenses: $1 million+
- Indemnity: Nearly $4 million
Analysis:
This case illustrates the severe consequences of software inadequacies, particularly in critical applications like risk modeling. The financial collapse of the customer due to reliance on the software led to a substantial claim against the developer. E&O insurance covered the significant legal expenses and indemnity costs.
For software developers, particularly those creating applications for high-stakes industries, comprehensive E&O insurance is vital to mitigate the risks of substantial financial claims due to software performance issues.
Conclusion:
Protect your software business from potential high-stakes claims. Explore our tailored insurance solutions to secure your operations and reputation. Learn more about how we can help here.