Incorrect Domain Registration Causes 6.000 Euros in Damage
An Internet presence including a suitable domain is part of every business today. Registration is often the responsibility of the IT service provider in charge. But there are a few obstacles on the way to a suitable domain, especially when it comes to registrations abroad - as the IT expert in this real exali damage event had to learn.
International Domain Registration
Companies' business presences are becoming increasingly international and strive to have a correspondingly broad online presence, including the appropriate domain. For this reason, an IT service provider insured through exali was commissioned by a German steel and technology company to create a website and secure a suitable domain. This was to help open up the South American market.
To make sure that the domain name requested by the client was really available, the IT expert checked it online. His feedback was positive: The domain was still available and the website could be registered. This was great news for the company, which was planning a major trade fair appearance. Here, the company also wanted to present its expansion plans, including the new South American website.
For the fair, the company also commissioned the printing of extensive advertising materials. This included several thousand flyers and posters - all of which, of course, contained a reference to the newly established website. After this comprehensive preparation, the group started the fair in good spirits.
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After a successful event, the bad news came: although the online check showed that the domain was available for the website, the responsible registry in South America now informed the IT expert of the following: Due to the similarity to another address, the desired domain name cannot be reserved.
Based on the feedback from the IT service provider, the company that placed the order had not only produced faulty advertising material, but also distributed it to interested parties at the trade fair. With a domain that would not exist in this form.
Not Alone in Case of a Damage Event
Whether it is due to faulty programming, missed deadlines, legal infringements or even faulty domain registration: if you cause financial damage to your customers, in the worst case scenario you are threatened with horrendous claims for compensation. With Professional Indemnity Insurance through exali you do not have to face this misery alone. The insurer checks the legitimacy of the claims made against you, settles the damages if necessary and fends off unjustified claims on your behalf.
Failed Domain Registration – 6.000 Euros in Damages
The omission meant not only a lot of trouble for the IT expert, but also financial consequences. The company that placed the order held the service provider liable for the damage caused and demanded reimbursement of the costs for its wasted expenditure on the advertising material. These were made up of:
- Project coordination
This resulted in a total damage amount of 6,000 euros.
By the way: The company would have had the additional option of asserting further claims due to damage to its image. Such claims are also covered with Professional Indemnity Insurance through exali.
Protected in the Event of Professional Negligence
Fortunately, the IT service provider did not have to deal with this claim for compensation alone, but reported the case to the insurance professionals at exali. After a careful review, they forwarded the case to the insurer, who quickly settled the claim.
This was possible due to the integrated FInancial Loss Insurance, which also covers futile expenses incurred by clients. In this way, Professional Indemnity also covers the financial loss suffered by the company due to the IT service provider's mistake.
Vivien Gebhardt is an online editor at exali. She creates content on topics that are of interest to self-employed people, freelancers and entrepreneurs. Her specialties are risks in e-commerce, legal topics and claims that have happened to exali insured freelancers.
She has been a freelance copywriter herself since 2021 and therefore knows from experience what the target group is concerned about.