Professional Liability Covers Countersuit from Fee Collection

The cost of defending against even frivolous lawsuits

Ed Rozak is the president of N2Net, a Cleveland area Internet service provider. The company was started in 1995 offering dial-up IProfessional Liability Insurancenternet service only. Now it operates its own data center with a focus on voice services and phone systems.

Rozark was working in his office one day when one of his administrative assistants buzzed to inform him that N2Net had been served with a lawsuit.  What started as a $300,000 claim quickly grew to over $100 million. The suit alleged breach of warranty, failure to perform, and negligent acts. In reality, N2Net sued its client in an attempt to collect the unpaid fees owed. What they got was a frivolous claim countersuit.

Many professional liability lawsuits start  with a dispute over fees. As the owner of a technology company, it is your responsibility to ensure that your business is protected in the event your company is the target of a frivolous claim. Professional Liability coverage is essential to maintaining everyday business operations. As N2Net discovered, you don’t have to do something wrong to be sued; all it takes is an allegation to cost you thousands or even millions of dollars in legal fees.

N2Net was fortunate enough to have purchased a quality Professional Liability policy. Their insurance company not only provided coverage against the claim, but also brought in the area’s best legal counsel. Summary judgment brought about a positive result, dismissing the plaintiff’s claim and collecting the fees due to N2Net.

Keeping your reputation intact is important, as is keeping your business up and running. Investing in Professional Liability coverage will protect your tech company’s future.

Source – Overcoming the Unexpected; The Hartford; Video Series July, 2013

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Categories: Professional Liability

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