Technology companies need to assess the risks they face and ensure they have suitable insurance cover in the face of the rising amount of litigation brought against IT firms, according to Hiscox.
Sian Fisher, managing director of Hiscox Insurance Company said: "The technology sector faces very specific risks and more companies need to follow the example of those who have become very sophisticated in their management of those risks."
Over the past four years, Hiscox said it had seen a 40% rise in professional indemnity claims against IT companies. This figure comes from Hiscox claims data for 1997 to 2002.
Hiscox said the increase was due to two factors: an increasing trend towards litigation and the reliance businesses place on their technology.
Fisher added: "Insurance does have a part to play in protection IT companies' interests if they become the subject of legal action. However, of greatest importance are the preventative risk management steps that will reduce the chances of being sued in the first place."
