Home – New Forums Selling online Insurance required for Selling software in the US

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  • #996251
    badlydressedboy
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    Hi,

    I sell my own database related software on-line, globally. I have a new American lead for a fairly sizeable sale and they are demanding I have high levels of general, professional and data liability insurance. This is proving very hard to get in Australia and insurance agents have quoted me rates 10 times higher than just getting regular Aus company insurance.

    Does anybody have any experience in this area? I’m not sure if this is something standard that all software companies that sell to the states come up against for larger contracts or it is just this company rolling out a standard contract template with little thought to the context/actual need for it.

    Even if no-ones knows directly any recommendations of companies to talk to about it over here would be great!

    Thanks a lot

    #1206485
    DavidChin
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    Hi

    What levels are they seeking?

    Regards
    David

    #1206486
    badlydressedboy
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    DavidChin, post: 245396, member: 81210 wrote:
    Hi

    What levels are they seeking?

    Regards
    David

    Commercial general liability including Broad Form Property and Personal Injury: 4mill usd per occurance

    Technology/Professional Liability and Data Protection Liability including the following: Network Security Liability and Privacy Liability, Security Breaches or loss of Personal Data
    10mill usd

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    #1206487
    Delphic
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    Do you have an entity in the US or are all transactions done through your entity in Australia and you are exporting the product?

    The reality is that US insurance coverage is an area which very few advisors will get involved in, and the vast majority that do, actually do it incorrectly by advising that a policy which states ‘worldwide’ is adequate. The regulatory and legislative environment in the US regarding insurance is a minefield, each US state has its own requirements and I none of them (and by virtue of this the courts) will not recognise an Australian Insurer’s insurance policy overseas.

    There are various strategies to overcome this, but as you have identified, this does cost money.

    What I would suggest first is having a conversation with a specialist lawyer who can give you advice on the potential liability and also suggest amendments to the contract so you do not have to go through this.

    I have a considerable IT portfolio and come across this regularly, you should be able to negotiate the exposure to be under Australian contract and therefore your insurance in Australia will be adequate.

    In regards to the insurance, you should have in place a IT Liability and Cyber Liability policy with a good insurer.

    Please be careful, if you can’t get the contract to work for you and limit your exposure then it may not be worthwhile. More than happy to discuss further offline.

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