What contractual requirements can the IT professional expect?
In recent years, we have seen a massive change in the IT industry regarding the employment of specialists. More and more companies resign from a permanent job in favour of B2B contracts. This not only reduces the costs of keeping an employee in the company but also gives unlimited opportunities to use the knowledge of specialists tailored to a specific project. For contractors, it also creates many opportunities for higher salaries, freedom of action, flexible working hours and the fact that they can work for several entities not only locally but also on international markets. In the era of remote work, signing contracts with companies from around the world becomes everyday life and testifies to the mobility of the IT market.
Contractor’s responsibility in cooperation with international partners
When starting cooperation with foreign entities, it is worth paying attention to the contractual requirements and the contractor’s liability. This liability may be limited by the contract and may also be up to the full amount of the damage caused. The lack of defined limitations in the contract means that the client can pursue claims without restrictions. And yet, a specialist running a business bears full civil liability for the work he/she performs and may end up with liability with all his property. This responsibility increases with an increased scope of decision-making or independence of the work performed. The more independent work, the greater the risk of exposure to claims. It should also be remembered that the contractor’s work in several places at the same time, for obvious reasons, increases the risk of claims against such a person. Therefore, the standard contractual requirement of international partners is the expectation of professional liability insurance.
Financial security and a good night’s sleep for IT specialists
On the one hand, the professional civil liability insurance policy ensures a good night’s sleep for a specialist. On the other hand, it gives the company the possibility to transfer third-party claims to the contractor’s policy. Therefore, companies from Western Europe, and Asia, not to mention the US and Canadian markets, require Professional Indemnity Insurance, with appropriate scope of protection, including contractual liability, pure financial losses and, more often, third-party liability insurance for cyber incidents. The required sums of insurance start from 1 ml Euro or USD upwards. If the liability of the person concerned can be determined, it is also possible to attribute the error to the person and claim compensation for it. Therefore, the choice of the Insurer is not without significance. Most companies require insurance policies from insurers with a minimum rating of A, which means that they have a high financial capacity to settle liabilities and thus pay claims.
Scope of liability under professional and cyber liability
As part of liability insurance, professional companies require, among others, liability for breach of a written or oral contract in a situation where the work performed does not meet the agreed specification, does not fulfil its function or does not serve the intended purpose. The contractor’s work may result in inadvertent defamation, slander or discrediting of the client’s products. It must be remembered that contractors very often have access to the customer’s systems and databases, which is associated with the risk of breaching confidentiality, privacy or the use of confidential information. The risks related to the infringement of intellectual property rights or the disclosure of trade secrets cannot be overlooked.
The contractor’s work or mistakes made by him may result in the weakening of the security infrastructure of the entire project and thus expose the client to cybercriminal attacks. Therefore, with international partners, more and more often, a contractual requirement is cyber risk, in particular in the compensation part. The territorial scope of insurance is also essential. More and more Polish entities or foreign partners have contractual requirements from the US or Canadian market, so when choosing insurance, this area must be covered by the policy without any exclusions or premium increases.
Risk and liability assessment of contractual requirements
Insurance for a contractor in international contracts depends in fact, on understanding the scope of work and responsibilities of the contractor and what is his role in the projects he co-creates. Very often, unfortunately, contractors are left to themselves when it comes to analyzing or understanding the terms of the contract. Our role as an Insurer is to help IT professionals assess and understand risks and propose contractual solutions. We have experience in discussions with hundreds of companies, and we are happy to provide support. We are open to debate, conversation and help. We have launched many communication channels – you can contact us by Calendly, by phone or by e-mail.
To sum up, if you are looking for good professional liability insurance for IT specialists, we offer assistance in risk assessment and understanding contractual requirements and protection:
- about the international scope of professional liability insurance (Professional Indemnity Insurance), including contractual liability, pure financial losses and cyber,
- sufficiently high sums insured,
- Worldwide coverage, including the US and Canada
- offered by an insurer with an international A+ rating,