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September 30, 2022

CertAsig: Professional liability insurance for developers and IT consultants, key micro-trend in specialized insurance in 2017

The key micro-trend in corporate specialized insurance will be, in 2017, the professional indemnity insurance for developers and IT consultants, according to an analysis performed by an insurance company remitted to Agerpres on Tuesday.

In Romania there are more than 14,000 IT consulting and development companies, which together generate a turnover that exceeds 4 billion euro and employ over 75,000 professionals.

Consultants and IT developers are increasingly exposed to legal consequences from unhappy customers. In the case of system malfunctions, some data losses or IT security problems, IT developers may be forced to pay significant damages to dissatisfied customers, in addition to the income losses.

The insurance products specialized for IT companies cover many potential risks, such as accidental negligence generating financial loss for the consultant’s client, costs of potential compensations payable to customers (in case of negligent business or counseling), reimbursement of the tariffs paid by customers or the risk of failing to pay outstanding bills, legal defence costs. Insurance can be extended to cover including legal agents or sub-contractors of the insured IT consultant.

“We estimate that less than 10 pct of these 14,000 IT companies have any professional liability insurance, although this is a standard requirement from potential foreigner customers. Should they want to expand internationally and compete for more substantial and more profitable projects, IT companies in Romania will simply have to be prepared and properly insured,” says James Grindley (photo), CEO of CertAsig.

Wind farms insurance is another important trend of 2017, according to CertAsig brokers. The wind farms are a growing industry in Romania, currently representing about 6 pct of total energy production in Romania (according to the Transelectrica centralized data ).

One of the most controversial industries in Romania, the forestry and wood processing operations, still raises question marks as to the companies in this field’s interest in insuring their business, and especially concerning the concretization of this intention.

“We’ve noticed a significant increase in interest from owners and forestry and wood processing companies, but the penetration rate of forestry insurance remains surprisingly low. For these companies, it is provided basic coverage in case of fire, lightning, explosion and the impact of aircraft. The additional risks that can be covered include inclement weather conditions (wind, tornado, hail, frost, snow and ice), landslides and floods, fire fighting expenses,” says James Grindley.

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