Liability Insurance ... Embedded Software

I currently am a partner in new company where we repair and return
electronic controls for customers whose warranty with the OEM has
expired. It can be as easy as diagnosing a failed relay or IC, and
replacing it.

Okay, so the insurance is straightforward, and probably cheap. A non
electrical/software engineer partner of the company got the minimal
coverage necessary to allow us to operate.

Lately, we are finding that a significant number of customers are now
asking for special customized firmware. This is where my confusion
starts.

The types of electronic embedded controls that we service have motor
controls,specifically motors that can cause INJURY.
 
1. If I want to rewrite the embedded software (firmware), what kind of
insurance do I need to get?
(It is desirable to rewrite the firmware because we know of defects in
it that cause the parts to fail faster. It is also desirable to
rewrite the firmware because some customers who seek our services want
customized operation with their controller).

2. Do I pay significantly more for insurance now that we want to go in
and change the firmware with our own? On a technical standpoint, it
seems that there is more risk in changing the OEM's firmware out of
their micros than simply troubleshooting the electronics and replacing
a part.

3. I don't know if such a business now requires E&O insurance (errors
and ommisions?) or product liability insurance.

4. If I simply replace a failed component, is the OEM still
responsible for the product that is repaired by my company?

I really don't know the terminology of the different kinds of
insurance. I'm sure many of you in comp.arch.embedded are also small
business owners (or now, medium sized businesses).

Thanks,
Mike

In article <8188616d.0407130000.500c731e@posting.google.com>, Mike V. 
<valemike@yahoo.com> writes
>I currently am a partner in new company where we repair and return
>electronic controls for customers whose warranty with the OEM has
>expired. It can be as easy as diagnosing a failed relay or IC, and
>replacing it.
>
>Okay, so the insurance is straightforward, and probably cheap. A non
>electrical/software engineer partner of the company got the minimal
>coverage necessary to allow us to operate.
>
>Lately, we are finding that a significant number of customers are now
>asking for special customized firmware. This is where my confusion
>starts.
>
>The types of electronic embedded controls that we service have motor
>controls,specifically motors that can cause INJURY.
>
>1. If I want to rewrite the embedded software (firmware), what kind of
>insurance do I need to get?
>(It is desirable to rewrite the firmware because we know of defects in
>it that cause the parts to fail faster. It is also desirable to
>rewrite the firmware because some customers who seek our services want
>customized operation with their controller).
>
>2. Do I pay significantly more for insurance now that we want to go in
>and change the firmware with our own? On a technical standpoint, it
>seems that there is more risk in changing the OEM's firmware out of
>their micros than simply troubleshooting the electronics and replacing
>a part.
>
>3. I don't know if such a business now requires E&O insurance (errors
>and ommisions?) or product liability insurance.
>
>4. If I simply replace a failed component, is the OEM still
>responsible for the product that is repaired by my company?
>
>I really don't know the terminology of the different kinds of
>insurance. I'm sure many of you in comp.arch.embedded are also small
>business owners (or now, medium sized businesses).
>

You need to talk to an insurance specialist in your part of the world, 
wherever that is. They will advise what cover you should consider. Your 
local business advice centre, if you have such a thing, will have some 
contacts.

We do similar stuff and we have product liability insurance, but the 
insurance cost has an enormous price rise if we want cover for 
automotive products, so we don't do those.
-- 
Tim Mitchell

Hi Mike,

Sounds like professional liability insurance. As Tim said, you need to 
sit don't with a good broker. One that specializes in industry 
insurance. The cost will depend on the markets you serve. It is not just 
automotive that makes it expensive, there may be other areas such as 
medical that are either prohibitively expensive to insure or uninsurable.

Regards, Joerg

http://www.analogconsultants.com