What does technology Insurance cover? Technology insurance is a relatively new insurance product available to professionals in the technology industry, such as data storage, website designers, and software developers.
Technology insurance is comparable to errors and omissions (E&O) coverage for other professionals. E&O coverage is a type of insurance that protects professionals against claims arising from a failure to perform or inability to execute their professional services.
E&O insurance protects professionals in the legal, accounting, and other fields from lawsuits arising from the services they provide in the course of their work. Similarly, technology insurance protects technology professionals who work on systems, software, and hardware that have an impact on the day-to-day operations of their clients’ businesses.
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What Exactly Is Technology Insurance?
Technology insurance policies are available to meet the needs of technology companies of all sizes.
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Technology insurance provides a variety of coverage options to protect against all types of business claims. Businesses can maintain coverage for potential legal defense costs with liability insurance, even if the allegations made against your company were unfounded.
A policy will also cover any resulting judgments against your company, including court costs, up to the policy’s coverage limits. A technology insurance provider can provide critical coverage options such as:
- Insurance for General Liability
- Insurance for Workers’ Compensation
- Insurance for Commercial Automobiles
- Income Protection Insurance
- Excess Liability Protection
- Errors and Omissions Insurance Crime Insurance
- Officers and Directors Insurance
- Insurance for Property and Equipment Breakdown
- Insurance for Cyber Liability
- EPL Coverage
Because technology is at the heart of many modern businesses, almost any company that uses technology can benefit from purchasing technology insurance. Because of the risk of data loss or theft, businesses that use cloud-based services and similar technologies should maintain a technology insurance policy.
Companies that develop software or other technology may be subject to intellectual property lawsuits and should have a policy in place. When making a decision, consider how important technology is to your operations.
What Does Technology Insurance cover?
An E&O claim against a technology professional is likely to include compensation for a variety of events caused by software or hardware failure.
Claims may include hacking and theft of client information or the information of client customers, notification of those affected, credit monitoring costs, income lost as a result of a missed deadline, or even a claim based on intellectual property rights.
Consider the well-publicized hackings and data breaches that have occurred in large corporations in recent years. Banks, retail businesses, and government contractors were among the targets. Businesses in those cases were required to notify millions of their customers about the breach and provide credit monitoring services for extended periods of time.
Business resources were diverted while businesses worked to remove malicious code and restore normal operations to the system, resulting in a loss of productivity during that time period. These occurrences occur on a regular basis. Even if the malfunction is not the result of a bad actor and is the result of a programming or operational error, the client will still suffer productivity loss and other intangible losses.
In all of these cases, the target business will almost certainly file a claim against the technology service provider(s) who were in charge of the businesses’ information security. Some technology contractors subcontract out a portion of their clients’ requirements. The client’s claims apply to any contractor or subcontractor who provided security software, licensed the software, or maintained the hardware.
Technology Insurance coverage available
Here is a list of some of the different types of technology coverage policies available:
Cybersecurity liability
A cyber liability policy protects against damage caused by cyber attacks, data breaches, and other common risks associated with electronic communications and data storage.
They frequently cover the cost of recreating damaged or lost data or systems, but not the costs associated with the loss or damage, such as legal fees and data notification costs. The term cyber liability is sometimes used broadly to describe technology-related risks and insurance in general.
Data breach notification regulations
If an organization suffers a data breach that compromises personal data, such as Social Security numbers and financial and health information, federal and provincial laws dictate the requirements for notification.
Laws differ in terms of how long individuals must be notified of a breach and what situations are exempt from the requirement. Coverage for Data Breach – assists in covering the costs of notifying individuals whose information was stolen, managing public relations, and good faith advertising.
Cyberspace property
Your company’s intangible property. Websites, data, and networks are all examples of this. All of these intangible assets are vulnerable to damage.
To protect your cyber property, you may need to broaden the scope of your existing policy’s property enhancements. Check to see if you have any coverage that would protect you if your company or an employee caused cyber property damage to another organization.
Technology E&O
Technology errors and omissions (E&O) coverage protects against claims by a client who suffered a loss as a result of your company’s mistakes.
These errors must be the result of an error or oversight in a product, such as a software program or a web service. E&O insurance covers the costs of liability claims made against your technology company.
Liability for media and intellectual property
Because all content on the Internet is considered published, it is subject to copyright and infringement. Libelous content about a person or company can be considered. When publishing or posting anything to websites, forums, or social networking sites, use caution.
As the technology industry grows, so will the exposures and threats to technology business operations. CMB Insurance Brokers can assist you in protecting your company against these specialized risks.
A good technology insurance policy should protect you against errors and omissions, as well as personal injury, bodily harm, failure to prevent unauthorized access, and unintentional introduction of malicious code. Additional coverage for first-party cyber, regulatory defense, and intellectual property may also be required.
The benefits of Having Technology Insurance
Your legal defense is taken care of
The insurance policy pays to defend your claims regardless of their validity with technology insurance coverage.
You would have to pay for your own defense if you did not have insurance, which can be costly. It could be enough to push your company into insolvency, forcing it to close at a high cost to the owners.
Your losses will be compensated
Not only will the insurance cover the cost of your defense, but it will also assist you in paying the amounts required to resolve a claim or a monetary judgment assessed against you.
You demonstrate that you are a trustworthy business partner.
Having technology insurance indicates that the insurance company regards you as a responsible professional who backs up your work.
If you were not a trustworthy businessperson, you would not have been willing to pay the insurance premiums, nor would a reputable insurance company have insured you.
The best technology Insurance
When selecting an insurance company for your technology business, it’s critical to understand that the policy language differs from that of, say, a retail shoe store or a pizzeria.
Technology companies face unique risks that are simply not covered by standard insurance policies (or are undercovered).
When we take on a new technology company client, we frequently discover coverage gaps caused by policy misclassification. Particularly when technology firms are insured by carriers that do not have a dedicated technology insurance program.
The Top Technology Insurance Providers
Technology firms have only been around for about 20 years. Insurance has been around for 400 years, and as strange as it may sound, the language of an insurance contract hasn’t changed all that much in that time.
Many traditional insurance carriers still do not understand and do not properly provide coverage for the various tech industries.
Most technology businesses, how they’re built, what their product is, the fact that they don’t have a physical product, that their entire business is conducted online in computers and databases; these types of exposures create unique opportunities for coverage gaps.
- Chubb
Chubb is an excellent insurance company with an A rating from AMBest. Most people are familiar with Chubb’s high net worth personal lines policies, but their business insurance product is fantastic.
Chubb’s claims handling is excellent, and they have a DigiTech insurance program, which includes Tech E&O, that is tailored specifically to technology companies.
Chubb will be an excellent choice for the vast majority of technology firms.
Learn more about Chubb Technology Products.
- The Hartford
Technology Insurance Hartford, another top-rated option for technology insurance is The Hartford. The Hartford has a dedicated unit within the company dedicated to meeting the needs of technology businesses.
The Hartford is also A-rated by AMBest and has an excellent claims management team. There is no way to go wrong with The Hartford.
- Hanover
The Hanover is yet another fantastic option for technology insurance.
Hanover is unique in that they will do custom work on their product to meet the specific and special needs of technology companies.
Hanover, like all of the companies we represent here at Rogue Risk, is A-rated by AMBest and has best-in-class claims handling.
- The Rub
You can extend your general liability insurance into foreign countries if you are traveling or have offices, clients, investors, etc. outside of the United States.
The key to locating the best technology insurance company is to match your specific risk exposure with an insurance company that offers technology-specific products.
Miscellaneous or generic errors and omissions insurance policies, as well as professional liability insurance policies, do not provide the necessary coverage to protect your business.
Make certain that the insurance agent you’re working with is knowledgeable about technology insurance and can walk you through the nuances of the required coverages.
They would love to speak with you if this is the type of relationship you want with your insurance provider.
Conclusion on technology Insurance
Technology insurance can help your business by reducing certain risks that it may face during normal operations. Whether your company has a few clients or tens of thousands, a single data breach can have costly consequences that affect your entire business.
Depending on the nature of your business, some suppliers or investors may require you to have technology insurance. Contact a reputable technology insurance company for more information on technology insurance or to purchase a policy.
Frequently Asked Questions
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