ICT project delay and liability: what if the deadline is not met?

Delivering a complex ICT project often takes longer than planned, which means the intended completion date is not always met. This can have unpleasant consequences for all parties involved. An example.

An ICT company is carrying out a major assignment to implement a Document Management System (DMS) for its client. The DMS is crucial in light of an upcoming reorganisation, making timely delivery a must. The client therefore includes contractual provisions stating that the ICT company is liable for both direct and indirect (consequential) losses if the project is not completed on time.

During the project, the data structure proves to be more complex than initially estimated. As a result, the agreed contractual deadline cannot be met. The client loses confidence in the ICT company and holds it liable for loss of revenue and profit.

Many professional liability policy wordings do not cover claims of this nature. Only a limited number of policies provide adequate cover.

Would you like to know how this applies to your situation? Please contact Sandy Buurman-Drenth, Senior Account Manager TECH, at +31 (0)6 387 258 41.