Brokers have warned technology suppliers that their general liability policies may be inadequate and could expose them to large claims.

The warning came following a US case in which AOL claimed on its general liability policy after software it had installed caused companies' systems to crash and lose stored data.

AOL made a claim against its insurers, St Paul Mercury, but the courts rejected the claim because the installation had not caused damage to "tangible property".

The court held that software did not constitute tangible property.

AOL later reached a settlement in the region of $15.5m (£8.5m).

Law firm Watson Burton said insureds should check with their brokers that their general liability policies provide the cover they require.