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Tag Archive for: E&O

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Business Trends that Drive the Need for Technology E&O

In the world of technology, it’s always a given that things can go wrong. Unintended errors may occur because of software programming or performance issues or any other aspect of providing a technology product or service. When this results in customers experiencing a financial loss, they make take legal action to be compensated. In order to provide a level of protection against this type of risk, a Technology Errors and Omissions liability policy is needed.

This type of insurance coverage could include costs associated with a legal defense for accusations made against a technology company. It could cover court costs and subsequent judgments against a company, up to the limits of the insurance policy. Each technology errors and omissions insurance policy is different in scope. You will need to work directly with a professional risk advisor to ensure that the policy you are considering matches the exposures that are unique to your firm.

Business Trends that Drive the Need for Technology E&O Coverage

We have observed a number of notable changes driving the need for Technology Errors and Omissions coverages. They include the fact that more business contracts now require evidence of E&O coverage, which naturally will increase the size of business contracts and the amount of time and attention you need to devote to them.

What Can Technology Firms Do to Mitigate their Exposures?

There are several ways to mitigate exposures to electronic disputes. Chief among them is a legal review of all purchase orders, contracts and license and service agreements. You will need to review limitations of your liability in all documents, as well as any warranty disclaimers in your contracts. It’s also prudent to review severability clauses, indemnification procedures and arbitration provisions.

But Our Commercial General Liability Policy Will Cover Technology Exposures – Right?

Wrong. Some technology firms assume that their Commercial General Liability policy will respond to claims arising from programming errors or software failures. It is unlikely that a Commercial General Liability coverage would respond to a technology related claim. Firms also make the assumption that by simply purchasing any Technology Errors and Omissions insurance policy, all of their technology risks will be covered. Smart firms find a way to get educated on Technology Errors and Omissions risks and cyberliability insurance products. They will weave together their internal and external risk control measures before purchasing an insurance program for their organization.

Establishing Technology Errors and Omissions and protection against cyber-related risks is an important part of your business. Working with a TechAssure Association member can help you identify your exposures and establish a risk management program for the best protection. Please give us a call for more information.

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Technology Errors and Omissions: Not All Insurance Programs Cover the Unique Exposure of a Tech Company

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.