Information Technology (IT) development is a foundation for innovation in Australia and internationally. Companies hire IT developers to create software, websites, applications and other IT systems. But how do IT developers deal with liability? Australian businesses need to consider their approach to IT liability to help ensure that IT risk is correctly assessed and managed and that innovation flourishes.

Australian Government Guidance

The Australian Government represents the largest IT market in the nation. Securing Australian Government contracts is critical to the success and growth of many Australian IT developers. This work provides opportunities to develop and then leverage innovative products and solutions, domestically and abroad.

The Government offers a guide to limiting supplier liability in information communications technology (ICT) contracts with Australian Government agencies.

The ICT guide is intended to help Australian Government agencies implement the ICT liability policy. It also aims to assist ICT suppliers doing business with the government with understanding how agencies will implement the policy. Importantly, it serves as general guidance for the ICT community. It is a detailed and thoughtful analysis of risk issues and how to address them.

IT Industry Issues

The policy recognises that requiring IT developers to accept the risk of unlimited liability or taking out inappropriately high levels of insurance, can deter companies seeking to bid for Australian Government contracts. Relevantly, small and medium sized developers may have difficulty obtaining high levels of insurance at reasonable rates. Smaller players also have limited power to negotiate insurance coverage with their insurers.

What goods and services apply the ICT liability policy?

The ICT liability policy applies to the procurement of information and communications technology and encompasses the use of hardware, software and services to create, store, receive, transfer, process and present information.

As stated in the policy, this includes:

(a) Hardware – tangible, physical items such as personal computers, hard disks, keyboards, monitors and servers. Communications hardware includes modems, cables and ports;

(b) Software – programs that provide instructions on how an electronic device will operate. Examples of software include operating systems, word processors, spreadsheets and databases;

(c) ICT services – providing analysis, advice, development and support of ICT infrastructure. These services include ICT strategic planning, design and development of applications or networks and maintenance of ICT facilities; and

(d) Major office machines – printers, photocopiers, faxes, electronic whiteboards and multi-function devices.

Questions? Please get in touch! LegalVision’s experienced IT Lawyers would be delighted to assist.

Ursula Hogben
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