Real Claims that were defended and paid under The Hartford’s Suite of Failsafe Technology Products

• Type of Claim Introduction of Malicious Code
• Policy Type FailSafe GIGA with Security Coverage Endorsement or FailSafe TERA
• Cause of Action Failure to Prevent the Introduction of Malicious Code
• Type of Insured Systems Integrator
• Facts A systems integration company provides hardware and software integration services. When uploading a new software program for a customer, a malicious code is inadvertently transferred to the customer’s network, causing widespread loss of data and disruption to the customer’s operations. In the download process, the virus spreads to the client’s computer system, resulting in widespread loss of data and a computer network shutdown. The customer seeks damages for the costs to reconstruct the data, as well as the financial impact associated with the disruption of business operations.
• Resolution Claim expenses: $35,000 Indemnity: in excess of $400,000

• Type of Claim Intellectual Property Infringement
• Policy Type FailSafe GIGA with Intellectual Property Coverage Endorsement or FailSafe TERA
• Cause of Action Copyright Infringement
• Type of Insured Web Site Developer
• Facts A Web site development company provides creative and maintenance services for their customers’ Internet, Intranet, and Extranet activities. In the process of developing a Web site for a customer, the company uses an image owned by a third party without the appropriate permissions. The company and their customer are both sued by this third party for infringement of copyrighted materials.
• Resolution Claim expenses: $5,000 Indemnity: $30,000

• Type of Claim E&O
• Policy Type FailSafe GIGA or FailSafe TERA
• Cause of Action Negligence/Failure to Perform
• Type of Insured Software Reseller
• Facts A software reseller installs and provides maintenance services for accounting software applications that are specifically focused for retailers. A customer’s audit reveals that several journal entries were misclassified as a result of an error in the software program. While the problem is corrected, the customer incurs significant fees due to the misclassifications, and sues the software reseller for damages associated with the additional work, including: • Audit fees • Costs to restate prior quarter financial statements • Accounting fees • Legal fees
• Resolution Claim expenses: $35,000 Indemnity: $120,000

• Type of Claim E&O
• Policy Type FailSafe GIGA or FailSafe TERA
• Cause of Action Negligence/Failure to Perform
• Type of Insured Software Developer
• Facts A software company manufactures and distributes software used by businesses to conduct risk modeling. A customer purchases the software and relies on it in making financial decisions. Following the customer’s financial collapse and bankruptcy, they sue the software developer for providing inadequate software that they relied on in making decisions that led to their collapse.
• Resolution Claim expenses: $1 million+ Indemnity: nearly $4 million

• Type of Claim E&O
• Policy Type FailSafe GIGA or FailSafe TERA
• Cause of Action Negligence
• Type of Insured Telecommunications Equipment Manufacturer
• Facts Company Z is a telecommunications equipment manufacturer that designs and distributes connectivity hardware that is used to enhance communications within a wireless, local loop telephone system. After the installation of more than 10,000 of these units for a large telecommunications customer, an installation problem that causes the units to fail is traced back to Company Z’s schematics. As a result, the customer seeks financial damages from Company Z.
• Resolution Claim expenses: $5,000 Indemnity: $225,000