united-kingdom contract-law software medical
medical software: liability vs indemnity in UK?
<p>if one is doing a medical software for other company then one needs indemnity (client may have to pay to fix errors) or liability insurance (patient may be badly diagnosed)? or both?</p>

<p>Ideally, both.</p>

<p><strong>Indemnity</strong> means security against or exemption from legal responsibility for one's actions. An insurance contract is a classic example of an indemnity: in return for your premium they agree to indemnify you against whatever legal liability they are insuring. In a client/contractor relationship there <em>may</em> be things the client will indemnify the contractor for, however, most clients would be unwilling to extend this to indemnifying the contractor from the quality of the work. For example, if the correct input to your software gives incorrect output and the client suffers damage as a result then they would quite rightly want the option of suing you.</p>

<p><strong>Liability insurance</strong> is a type of insurance (either public, product or professional) where your insurance company will indemnify you against negligence providing that you have complied with the policy terms. Basically, when you get sued, they will defend the case and pay out the settlement and costs. Note that this type of insurance does not cover fines or criminal charges levied by governments; there are policies that do subject to public policy constraints (e.g. if a person is penalised by the state then public policy dictates that they cant just offload the penalty to the insurer). Nor does it cover the cost of rework if required. </p>
