Every growing and established firm conducts business with some amount of risk. It is risk that brings the most reward to a company but it can also bring great pitfalls upon a company because of unforeseen incidents. Technology companies are unique in how they operate and it is important to recognize that not just any insurance program or policy can fulfill the coverage needs of technology-based businesses.
Understanding the hidden risks of running a technology firm is important when deciding exactly what insurance coverages you may need. For the purpose of this article, we focus on two types of coverages essential to technology firms: General Liability and Errors and Omissions.
Technology Errors and Omissions can be expanded to include coverage extensions that address risks from network security, privacy, damage to intangible property and breach of security.
A standard General Liability policy issued to an organization protects it against liability claims for bodily injury and property damage arising out of premises, operations, products, completed operations and advertising and personal injury liability. A General Liability policy for a technology firm may have additional coverage restrictions and exclusions, making Technology Errors and Omissions coverage a vital tool for protecting the assets of a technology firm.
It is key that these two coverage components “sing in harmony.” While a General Liability policy has typical exclusions that tie to claims arising from errors and omissions, network security, privacy and breach of security, the language in the policy wording can be important. On the other hand, while an Errors and Omissions policy has exclusions that tie to other casualty policies, the language in the policy wording is also important. It is important to review these two coverage components together.
It is also important to remember that a Technology Errors and Omissions policy does not always extend to your subcontractors and may not be considered valid on a worldwide scale. Every insurance contract is different. The key to building a successful insurance and risk management program is to review where your company will in 12 to 24 months and then design an insurance and risk management program that will change with your needs.
Unintended exposure to Errors and Omissions claims can cause a company disastrous loss if their insurance coverage is insufficient. A member from TechAssure Association can help your company get the right coverage. By analyzing your company’s unique business needs, a TechAssure Association member can customize an insurance program to protect your company and your investments. Please contact us for more information.