The Custodian Insurance Industry Blog

May 20, 2020

COVID Insurance Risks to Information Technology Professionals

The COVID-19 pandemic has put technology firmly in the spotlight. Insurers are likely to see an increase in claims and contractual disputes involving IT professionals.

Increased demand for home working may reveal weaknesses in IT systems leading to an increase in claims.


Huge numbers of people are now working from home. With organisations increasingly relying on IT systems to support homeworkers, we expect that some IT systems may struggle to cope with the increased demand of users in multiple locations.

Your customers may discover that their IT systems are not as robust, or capable of adapting to this new environment, as they thought. You will be aware that dissatisfied customers may threaten or pursue claims in negligence or breach of contract.

Another consideration is that the sudden increase in working from home demand may also result in increased requests to managed service providers to widen remote access rights. If increased remote access is not matched with appropriate security controls, this may result in cyber-attacks or breaches, in turn resulting in claims against your business for failing to provide secure systems.

Reduction in project spend may lead to contractual disputes on on-going projects.

The economic challenges arising from COVID-19 may find your customers wanting to reduce or delay their IT project spend. This could lead on to an increased frequency of contractual disputes on on-going technology projects. We anticipate that your customers will be looking more closely at contractual termination provisions.

Project delays may leave you exposed for failing to meet contractual deadlines.

As IT professionals, COVID-19 may lead to delays in your ability to complete on-going projects owing to staff shortages and general upheaval. Contractual provisions relating to key project milestones will come into focus. We strongly advise that you review your contracts on existing projects and consider provisions relating to delay and liquidated damages.


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