Experimentation and Testing Clause

Some insurers have included exclusions in the insurance conditions of their general and personal insurance, such as the experimentation and testing clause, from insurance concepts in other industries. These pose a significant risk for freelancers and service providers. Two examples of such clauses:

“The insurance does not cover ... claims that result from the fact that products and services, their use or effect with regard to the specific purpose were not sufficiently tested - e.g. not in accordance with the state of the art or in the case of software without customary and appropriate program tests or in any other way.”

OR

“.. damage that could have been avoided through additional effort is excluded.”

The presence of a malfunction, such as a faulty data backup, which can lead to considerable damage, ultimately always provides the insurer with prima facie evidence free of charge that insufficient tests have been carried out. In such a case, an insurer with such a clause would have a good opportunity to deny the IT service provider insurance coverage. Such clauses are problematic to evaluate.