IT companies should make risk management a priority

Hiscox has warned IT companies to make risk management a priority to avoid mass claims pay-outs.

The cautionary message delivered to IT companies at a Hiscox sponsored seminar was that compensation claims are on the rise and effective risk management strategy is vital.

The cost of claims against technology companies has more than doubled in the last three years as compensation culture takes hold

The seminar, in association with Deloitte and technology law firm WHCG, coincided with Hiscox's sponsorship of The Sunday Times Tech Track 100
list.

A host of speakers joined the queue to urge companies to prioritise risk management.

Companies were also told to alleviate risks by taking much greater care when negotiating contracts, follow more rigorous business procedures, and set realistic goals.

The audience was told a significant percentage of IT contracts still fail to include any specifics about what software is designed to deliver.

Consequently there is a mismatch in expectations between the buyer and supplier.

Too often both sides will attempt to push too hard during the contracting process creating a resentful relationship likely to cause considerably more damage than benefit.

IT litigation, it was said, is an expensive time-consuming experience and
should be avoided at all costs.