M-F 8:00AM TO 5:30PM CST
Better coverage. Better price.
Don't Risk IT
84% of CIOs Probably Want to Hire You

84% of CIOs Probably Want to Hire You

New research shows that many C-suite executives want to invest in mobile software. However, IT companies need to be aware of the risks involved in new mobile trends.

Wednesday, April 2, 2014/Categories: consulting

Mobile Marketer reports that companies will be looking to hire mobile developers and marketing firms in the coming year. According to a new study done by IBM, 84 percent of chief innovation officers are looking to invest in more mobile features for their businesses.

This is great news for app developers. Let's look at where and how mobile is going to expand, and see what new liabilities you'll be exposed to.

Areas for Growth: Key Areas for Mobile Tech

Of the CIOs IBM surveyed, 94 percent think that mobile technology is key to winning the hearts of their customers. It makes sense. Mobile tech literally puts a company's brand into the hands of future customers, sending images and marketing across their smartphones.

In particular, companies are looking to expand and incorporate mobile technology in three ways:

  1. Enterprise solutions. Companies are looking for IT solutions that make collaborating easier. Enterprise software for mobile devices keeps employees connected throughout the day. About 70 percent of CIOs expect collaboration via social networks to play a major role in business in the next few years.
  2. Marketing. Mobile marketing has taken a huge leap forward in the last few years. Location sharing, text alerts, and mobile apps have optimized when and how customers receive information from your clients. And it works. A recent study by ExactTarget.com, a digital marketing company, shows that customers who subscribe to email marketing make a purchase based on those campaigns within six months.
  3. Digital-physical. More and more retail shops are moving toward a "digital-physical" model, which offers ways for customers to use their smartphones or other digital technology in a brick-and-mortar shopping environment. Mobile payments are becoming more common. Some businesses allow customers to launch a self-checkout by scanning items with their smartphones. Others, such as Walmart, will store online customer purchases in lockers at their stores, which the customer can pick up later.

How to Avoid Mobile Lawsuits and Liabilities as Mobile Tech Expands

Great, so businesses want more mobile tech, but what does this mean from a risk management perspective? Will you be exposed to new liabilities? Mobile platforms tend to be more vulnerable to security breaches, so IT companies must guard their mobile liabilities carefully.

Here's a breakdown of the three growing mobile markets, and the risks involved with each:

  • Enterprise solutions. "Solutions" is one of those words that can make you wince. Businesses demand technological solutions to their problems, and programmers must work through all the difficulties in making those solutions reality. Companies expect that software will work perfectly and combine all the tools they need. Developers can be liable when they don't meet those high expectations. Slow software, data loss, and compatibility issues can plague enterprise software and lead to lawsuits. If a mobile app doesn't work properly or isn't compatible with a firm's other software, you can wind up in an expensive lawsuit.
  • Marketing. A mobile marketing company that designs mobile-optimized websites or mobile apps can run into all kinds of trouble, especially if you work with financial information. When customers make payments through your software, you accept a major risk (even if you use third-party payment services). In addition, marketers always face the risk that they will disappoint their clients. Clients expect new marketing to pay huge dividends and can sue their marketing firm over disappointing sales numbers.
  • Digital-physical. As mobile payment systems are becoming more popular, concerns are spreading about malware attacks and other security flaws. (We've outlined the dangers of mobile wallets in the article "Wearable Wallets = Losable, Hackable Wallets.") Mobile devices have many security weaknesses (and people often use them unsecurely!). While new digital-physical mobile systems present exciting new opportunities, they also come with data breach and identity theft risks.

The good news for mobile developers is that these professional liabilities are protected with E&O Insurance. E&O coverage pays for lawsuits over data breaches on your clients' mobile apps, disappointing sales numbers after new marketing campaigns, and other lawsuits related to the quality and performance of mobile solutions.

To learn more, see our other articles on mobile app developer risk management.

The Small Business
Insurance Leader
800.688.1984 | 8 am - 5:30 pm CST | M-F
Customer Rating 4.9 out of 5
Read Customer Reviews


The Small Business Insurance Leader