IT Liability Insurance – Protecting Technology Businesses in Australia

Safeguard Your IT Business Against Professional Risks, Product Failures & Cyber Gaps

Technology businesses face unique risks. Whether you’re a software developer, IT consultant, hardware provider or cybersecurity specialist, one mistake, system failure or intellectual property dispute can result in costly claims.

IT Liability Insurance (sometimes called Information Technology Liability Insurance) combines multiple protections into a single tailored policy. It covers professional errors, third-party liabilities, and even certain cyber exposures — ensuring your business doesn’t face unexpected financial losses.

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What is IT Liability Insurance?

IT Liability Insurance is designed specifically for businesses operating in the technology sector. It integrates cover typically found across Professional Indemnity, Public Liability, and Product Liability policies, while also closing gaps that arise from IT-specific risks.

This means your business is protected if:

• Your advice, coding, or consulting results in financial loss for a client.

• A software error or system bug causes a client’s operations to fail.

• Your hardware or product causes damage or injury.

• You face an intellectual property or defamation claim.

• A data loss or security issue exposes your business to liability.

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Who Needs IT Liability Insurance?

This cover is highly recommended for:

• Software developers (apps, SaaS, enterprise solutions)

• IT consultants & contractors

• Systems integrators & hardware providers

• Web designers & digital agencies

• Cybersecurity specialists

• Tech start-ups building innovative solutions

If your business provides IT products or services, you face potential claims from both clients and third parties — making IT Liability cover a critical safeguard.

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Why Choose Clarke Lyons Insurance Brokers?

As specialist brokers, we help technology businesses find tailored cover that fits their risk profile. Unlike direct insurers, we:

• Compare multiple insurers for the best policy fit.

• Ensure your coverage closes common gaps between PI, PL and Cyber policies.

• Provide expert claims support if things go wrong.

• Understand the challenges Australian IT businesses face in today’s digital economy.

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Real-World Example

A software developer delivers a project with an undetected coding error. The bug causes the client’s database to fail, resulting in lost revenue and reputational damage. The client sues for negligence.

Without IT Liability Insurance, the developer would face significant legal costs and potential compensation payouts. With cover in place, the policy responds to legal defence and settlement costs, protecting the business and its future.

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Related Covers to Consider

• Cyber Insurance – for data breaches, ransomware, and privacy events.

• Professional Indemnity Insurance – standalone PI for non-tech professions.

• Commercial Property Insurance – protection for your office and IT hardware.

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Frequently Asked Questions

1. What is IT Liability Insurance?
IT Liability Insurance combines professional indemnity, public liability and product liability into one policy designed for technology businesses. It protects against claims from advice errors, software bugs, product failures, IP disputes, and cyber-related issues.

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2. What risks does it cover?
It covers professional errors, omissions, system failures, client financial loss, third-party damage or injury, IP infringement, data loss, and reputational harm.

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3. Who needs IT Liability Insurance?
Any business that provides IT products or services — such as developers, consultants, web designers, cybersecurity specialists, and system integrators — should consider this cover.

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4. How does IT Liability differ from PI or Cyber Insurance?
While Professional Indemnity covers advice-based claims and Cyber Insurance focuses on data breaches, IT Liability integrates these elements and fills coverage gaps unique to the tech sector.

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5. What isn’t covered?
Exclusions vary but typically include intentional misconduct, contractual guarantees beyond normal liability, and issues better addressed by standalone Cyber or Property Insurance.

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Contact us

At Clarke Lyons, we’ll help you secure comprehensive IT Liability Insurance that protects your business against costly claims.

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