Knowledge is Power
Explore our blog articles and media library, providing you with
further knowledge and resources to protect what’s important
to you.

Professional Liability in the Digital Age 

As the digital age has progressed, it has changed the way technology professionals work. IT consultants and remote professionals have a lot of freedom when it comes to working remotely. However, they also face unique challenges. It’s important to know what best practices will mitigate risk for your technology platform or company. 

Grand Mutual Insurance Services offers professional liability insurance for commercial clients in the technology and digital industries. This article includes an overview of the perils involved in running an IT consultancy or software development company. We also provide important advice on how professional liability insurance can protect your interests. 

Unique Liability of Consultants and Technology Professionals 

Whether you work as an independent consultant or sell software products to corporations, you face liability challenges unique to your industry. Some of the risks faced by professionals in technology, consulting, and digital industries include the following: 

  • Software defects: Software products are prone to bugs and glitches. A software defect may lead to system crashes and costly downtime for end users and subscribers. Does your professional liability insurance adequately cover your vulnerabilities? 
  • Security vulnerabilities: With connected devices talking to each other more and more through the Internet of Things (IoT), security leaks have led to weaknesses that hackers sometimes exploit. This can lead to equipment damage, business disruptions, financial losses, and potential injuries. 
  • User errors: Software and tech products with design flaws may lead to user errors. Complex or counterintuitive interfaces that lead to billing mistakes, for example, can quickly escalate into a lawsuit. 
  • Product updates and compatibility: Poorly tested updates can cause loss of functionality, causing reputational damage and putting you at risk of a lawsuit. 
  • Errors and Omissions: What happens if a software bug programmed by your developers causes a financial loss? With the right insurance, you can receive reimbursement for potential legal repercussions. 


Evolution of Professional Liability 

Digital transformation has changed how professionals work. For software developers and consultants, this has led to lucrative opportunities. On the other hand, professionals in this field face liability risks that traditional business insurance doesn’t reckon with. There are many vulnerabilities to consider when you conduct the bulk of your work online. 

Professional liability insurance covers negligence claims against yourself or technology consultants you employ. It also handles errors and omissions that occur as a result of providing professional services. 


The legal landscape that governs civil lawsuits is still adapting to new challenges. So, it’s important to find a trusted insurance company that can help identify potential risks and include them in your coverage. 

Case Study: Liability in the Digital Age 

Amazon has faced numerous lawsuits about products sold through the platform. While some rulings emphasize that Amazon is not a traditional merchandiser, other cases have held Amazon responsible for dangerous products, such as hoverboards sold on the platform, that injured buyers. 

In other cases, individuals have sued corporations for using photos sourced online without permission. In many cases, publishers acted in good faith, inadvertently using stock photos. However, such cases can lead to legal costs and business reputational damage. With the professional liability insurance, you can receive reimbursement for these costs. 

Risk Mitigation Strategies 

Professional liability insurance is one of the best risk mitigation strategies you can employ. The right coverage can reimburse you for financial losses related to negligence, errors, and other vulnerabilities faced by IT consultants and companies in the digital arena. 

In addition to reassessing your insurance coverage, it’s important to implement risk management strategies. Maintain a paper trail that documents advice and interactions that occur online and offline. Documentation can play a critical role in any potential legal actions. 

Shield Your Business with Professional Liability Insurance 

For IT consultants and companies, professional liability insurance provides protection against perils related to technology services. Grand Mutual Insurance Services also offers a complete suite of commercial insurance to help you manage risks unique to your IT consultancy or business. 

Contact us today to book a free consultation. 

Have questions? Our team at GMIS is here to help.

At Grand Mutual Insurance Services, we are committed to providing you with the most up to date information on the insurance market. Reach out to GMIS today for personalized guidance, and maximize advantages for growth and success:

[email protected]