Liability for custom software

It is possible that you have some exposure to liability. If something goes wrong and anyone is injured or dies as a result of some defect in the software or even possibly some misuse of the software that could have been foreseen and avoided by instructions, warnings, etc., liability could be claimed against you. It would be good to have proper insurance against these things, especially if you are regularly developing software for application and use in the medical field (or other areas in which there is some likelihood of risk). You can also protect yourself to some extent by incorporating your business or organizing it as a limited liability company, except to the extent that any liability may be caused by your own negligence. Further, you can minimize your liability by a well drafted agreement with the buyer, careful instructions as to use and warnings as to misuse. It takes some time, money and effort to do these things, but they are worth it to protect yourself from catastrophic liabilities that could put you out of business and into bankruptcy. Developing a relationship with a good business attorney who can learn your business and help to identify and minimize potentially catastrophic liabilities is advised. It is like insurance: it can be expensive, and you do not know whether or when you need it; but when something happens, you will be glad you have it.