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Liability insurance / E&O insurance

Hey all
I think I'm at the stage where I should get professional liability insurance - I make old fashioned desktop software (Windows). 50% of the sales are to the US. (I'm in the UK)
I'm partly covered by being a limited company, but it wouldn't be nice to lose everything because someone I claims shipped an infected executable/program crashed their business server/infringed upon some obscure patent/etc.
Any recommendations for good providers of this type of insurance (particularly any that understand the software biz) in the UK?
Thanks!
DV Send private email
Wednesday, January 21, 2015
 
 
Your company and you are separate legal entities. If the company gets sued then you wont personally lose your house or anything.

Perhaps you should look at personal income protection insurance  for yourself which could also cover you in case of accident or illness as well, to achive a similar result?

If your aim is to protect the assets of the company, you dont necessarily need insurance to do that. In the examples you give, you can ensure the license agreement for your software excudes consequencial damage caused to servers etc running your software - just an example of achieving the same thing by different means. As another example, you might be able to change the corporate structure to better protect the value in the company.

It might be a good idea to go and see a good corporate layer with alot of experience working with businesses like yours (ask them directly how much experience they have) and identify the risks and get some options about how to mitigate or eliminate them.
Billy Thorpe Send private email
Wednesday, January 21, 2015
 
 
layer = lawyer, sorry for the typos
Billy Thorpe Send private email
Wednesday, January 21, 2015
 
 
There are numerous kinds of comercial insurance that you can buy, as a UK Ltd company. Just make sure that whatever you get specifically includes US business. A lot of "standard" UK policies exclude US±Canada, as the costs of defending tend to be much higher there.

You may well be best lookinf at a "Package" policy, sometimes called "Commercial Combined", as this can cover you for numerous risks and as you are buying effectively several policies at once you'll enjoy a discount.

Talk to a broker if you want expert advice, but as a minimum you should investigate PI, E&O, D&O and Product Liability (as long as it covers software products).
Scorpio Send private email
Wednesday, January 21, 2015
 
 
"looking" Doh!
Scorpio Send private email
Wednesday, January 21, 2015
 
 
"If the company gets sued then you wont personally lose your house or anything."

Please specify the legal domain you are providing legal advice for.

In the US this is completely 100% false.

Perhaps you are intending to specify under UK law, which would be most relevant.

It's much more difficult to sue people internationally, since you generally need to retain competent counsel in the target country familiar with the issues. Consider also that americans are the most likely people to sue. Together, this means from a pragmatic standpoint you can reduce chances of these sorts of problems by having no business or personal presence in the US. However that is not the same as immunity.

If you are based on maintain any presence in the US you need E&O insurance. LLCs and Corporate veils do not protect you, the product creator, who has made an error or omission. You, the owner of the company with assets, are the one that will be named in the suit, and the judge will uphold that.

This even applies if you are a peon at Microsoft or Google. You, the creator of code that killed that old lady, will be personally named in the lawsuit. And you will lose the suit unless you agree to confess in court to your negligence, done under employment, in return for their dropping your name from the suit.

The negligent party can and will be sued. The corporate veil protects the assets of the partners, owners and investors who were not personally negligent. It does not protect the negligent party.
Scott Send private email
Wednesday, January 21, 2015
 
 
Some people think they weren't negligent because they didn't intentionally kill the old lady. That is wrong. If it was intentional this would be a first degree murder case and not a civil lawsuit for wrongful death.

In court I am going to bring in a set of expert witnesses who are going to ask to see your documentation proving that you are process certified and therefore followed best practices. When you don't have that, that proves you didn't follow best practices, which the jury will come to understand was a contributing factor to your negligent code.
Scott Send private email
Wednesday, January 21, 2015
 
 
I don't know if this will help you or not, but in the US, I use Techinsurance.com.
Demoneye Send private email
Wednesday, January 21, 2015
 
 
Thanks for the advice all.
It does state in the EULA that "we disclaim all liability for indirect or consequential damages that arise..." etc, but I'm not sure how binding EULAs are in the real world.
DV Send private email
Thursday, January 22, 2015
 
 
> Please specify the legal domain you are providing legal advice for.
>
> In the US this is completely 100% false.

I dont think it is a good idea to give or take legal advice in a public forum.

With professions such as lawyers, accountants or even programmers, you get clients who come to you saying "I need this" and the first thing you need to do as a professional is to think about whether they really do need it or whether they could do something else.

So my idea is that perhaps DV is earning £2000 per month now in his business and insurance may be too full on so he could perhaps achieve some of his aims by eg changing a license agreement and other simpler things like that.

On the other hand, perhaps he is earning £1,000,000 per month and is a really juicy target for litigation so he really needs the insurance, but he can still use legal means to reduce his risks in some areas.

It is just some alternative ideas and options for him, but he should go and get legal advice from an experienced commercial lawyer.


> It does state in the EULA that "we disclaim all liability for
> indirect or consequential damages that arise..." etc, but I'm
> not sure how binding EULAs are in the real world.

It is a contract between you and your clients, just as binding as if for example you sign a contract to buy a house. But there is the risk if it is not drafted by a lawyer that it may be invalid, so again you could reduce your risks by having a lawyer look at the contract/license for your software.

I think Scorpio's post is the best answer here, good stuff Scorpio
Billy Thorpe Send private email
Thursday, January 22, 2015
 
 

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