Claims Scenarios

Here are a cross-section of claims scenarios which an insured may experience and would be covered by our QBE PI Tech+ policy.

Breach of Contract - Failure to Deliver on Time

An insured agrees to supply software to a multi-national computer retailer that was intended to manage all aspects of service and repair relating to computers it sold.The contract involves the supply of licences for the software and the supply of services necessary to install and integrate the software with the retailer’s other systems.

The scheduled date of implementation passes and the insured is still trying to conclude the installation. The retailer “pulls the plug” saying that the software is of no use to it and that it has suffered loss as a result of the insured’s failure to complete the execution of the services on time.

With the support of the insurer, expert evidence shows that the software did work (or would have if the insured had been allowed to finish the job!) and that the reason for the late completion was the retailer’s own failure to provide timely assistance and co-operation.

Misrepresentation - The Software Delivered Bells But Not Whistles

A nationwide book distributor sends out tenders for a software package for administering its back-office systems. The insured says it has a ready-made software module that can do the job and wins the contract. Despite all their best efforts the software does not work as the insured said it would: the insured cannot quite make the module fit and the product is replaced with a rival software package.

A multi-million pound claim is pursued, seeking to recover sums already paid to the insured and the increased cost of working, cost of replacement products, mitigation costs and loss of profits.

Although the insured’s software did not “do what it said on the tin” and the customer was justified in rejecting it, the insurer provides indemnity and works with the insured to limit losses, as expressed by an effective exclusion and limitation of liability clause to the amount of the fixed-price project fee.

Infringement of Intellectual Property Rights

An insured provides software for the creation and use of electronic application forms for store loyalty cards. It enters into an outsourcing agreement and while the insured performs its services, it has access to some of its client’s software products.

After the outsourcing agreement comes to an end, the client claims that the insured has used its software to develop its own products which it is selling on to competitors and that its software infringes the client’s copyright.

With the support of its insurer and its specialist solicitor the insured is able to establish that its software has been created without copying or adaptation from any corresponding part of the customer’s software.

Libel

A claimant asserts that a number of individuals posted defamatory comments about its products on the internet. The insured is an internet service provider which accepts that it had temporarily stored the defamatory information (known as “caching”).

The critical question is whether the internet service provider is liable for publication of the defamatory material through its services. With the support of its insurer the insured argues before the court that the necessary ingredients for publication are missing.

The court agrees, concluding that an internet service provider that performs no more than a passive role in facilitating postings on the internet could not be deemed to be a “publisher” at common law.

These are examples only. Consideration of all claims is subject to policy terms and conditions and reviewed on a risk-by-risk basis.