The technology industry has many unique risk exposures — from global supply chain disruption to business operational risks. Establish a firm platform for growth by identifying current industry trends and emerging risks. We can help you analyze trends in technology to help identify the best way to protect your business and its assets against a wide variety of risks.
Technology Insurance Products
◾Errors and Omissions Insurance
Errors and Omissions Insurance, also called E&O coverage, protects your small business against claims that your negligence or work you completed led to a financial loss. In other words, it protects you in case that an error or omission on your part leads to a measurable loss for one of your customers or clients. Today, an increasing number of insurance carriers offer E&O Insurance, and these policies can be customized to protect you against the specific risks you face in your business operations.
◾Certificates of Liability Insurance
A Certificate of Liability Insurance is a document that identifies the key features of an insurance policy, including start and expiration dates, terms of coverage, covered parties (including primary insured parties and those with "additional insured" status), and policy limits. These certificates are frequently used as evidence of insurance coverage in lieu of an entire insurance policy because they present crucial coverage information in a condensed format.
◾Commercial General Liability Insurance
Commercial General Liability (CGL) is probably the most common business liability coverage. General Liability coverage responds to claims of bodily injury (someone comes into your office and slips and falls, or you go to a client's location and physically injure someone) and claims of property damage (you knock a vase off a desk during a client meeting). These policies typically also respond to claims of personal injury (including slander or libel), and advertising injury. General Liability can usually be purchased alone or in a package with Property coverage, Hired and Non-owned Auto Liability, and Umbrella or Excess Liability.
◾Professional Liability Insurance
Professional Liability can include basic technology errors and omissions coverage or can be broadened to cover claims of software copyright infringement or even cyber liability. Professional Liability coverage is available from more insurance companies than ever and it is possible to customize a policy to address your specific risks. Essentially, these polices protect you if a client alleges that your company's professional negligence caused them to suffer a financial loss.
◾Cyber Liability / Data Breach Insurance
Often purchased as part of a Technology Professional Liability policy, Cyber Liability coverage is designed to protect IT businesses against liability and expenses arising from the theft or loss of data, as well as liability and expenses arising from a breach of data security or privacy, particularly when you are hosting client information. While your clients should carry their own Cyber Liability Insurance for the data and personally identifiable or confidential information stored on their servers, IT firms are wise to protect themselves with their own third-party coverage as well..
◾Fidelity or Commercial Dishonesty Bond (AKA Employee Dishonesty)
Often required when you have clients in banking or financial services, third-party Employee Dishonesty provides coverage when an employee steals money, equipment, or other assets from one of your clients. This may include theft of money by electronic funds transfer. (First-party fidelity covers your property but is applied for separately.)
◾Workers' Compensation Insurance
In many states, if you have any employees, you are required to cover them under a Workers' Compensation policy. Workers' Compensation has two coverage areas: 1) medical and disability coverage for on-the-job injuries or work-related illness, and 2) coverage for your liability if an employee is injured on the job and alleges that your negligence contributed to the injury or illness (Employer's Liability). In many states, sole proprietors and company principals such as owners, officers, and partners can exclude themselves from Workers' Compensation coverage.
◾Bundled Insurance Package: Business Owner's Policy (BOP)
A popular policy among small IT businesses, the Business Owner's Policy (BOP) lets IT professionals save money by offering Property Insurance and General Liability Insurance as a packaged deal at a discount rate. The BOP is an affordable option for many small-business owners and offers protection from third-party liability, property damage, and even business interruption.
◾ General liability insurance
This policy forms the basis for your technology insurance portfolio. Most of your clients and vendors will normally require a minimum of $1 million in limits for the standard general liability policy. If you’re annual gross receipts from your fees and services are less than $150,000, then the annual insurance premium for this policy typically is around $425.
◾ Professional liability and Tech E. & O. insurance
This policy can be endorsed on to your general liability insurance policy to broaden your coverages to provide protection for your professional services exposures. These exposures typically involve claims and losses that arise out of your professional advice, consulting, custom programming and intellectual-property violations. The premium for this policy usually starts at around $1500 per year.
◾ Umbrella insurance
This policy is normally used to cost effectively increase your limits on your underlying coverages. This is sometimes referred to as excess coverage. The premiums for this policy are usually $450 per million dollars of limits in annual premium. Thus, if you wanted two million dollars more of limits your cost would be approximately $900 per year in annual premium.
◾ Workers compensation insurance
This policy is normally obtained once you have employees on your payroll versus having no employees or in utilizing independent subcontractors. The premiums for this policy normally start at $567 per year in annual premium. The premiums are based on gross annual payrolls.
◾ Non-owned/hired auto coverage
This coverage provides your company with protection from automobile claims or losses for liability that arise out of autos that your company does not own or if your company rents autos. If you have employees and/or independent contractors and they are using their personal vehicles on your behalf this will protect you and your company from auto liability claims that they may be involved in. The annual premium for this coverage is typically $175.
◾ Contents coverage
This coverage provides protection for your equipment, contents, inventory, raw materials, and can be extended to cover property of others. The premium for this coverage is based on the limits that you choose for your contents value. For example, if you had $5000 of contents coverage you might be looking at $200 a year in premium.
◾ Crime coverage
This is a bond and is not a typical insurance contract. If you have a claim on this policy the insurance company has the right to come after you for restitution. This would be similar to a bank’s right as a mortgage holder on your real property to come after you for a default. The premiums for this coverage are normally around $1775 per million dollars of limits. This policy specifically covers theft and/or employee dishonesty of third parties property.
Technology insurance can be easily designed for your unique niche specific industry exposures. The eight insurance policies that have been described above will typically provide the appropriate protection for 95% of all exposures to loss that you may face.