Technology Insurance is specific insurance designed for IT and technology businesses including self-employed individuals and IT consultants, any business that creates technology and generates revenue through the sale of technology may be eligible for Technology Insurance.
Why do you need Technology Insurance?
As companies rely more on information technology solutions to keep up with market competition, the pressures and stress of accountability and delivery of products and services are also increasing. In many business relationships, companies are involving their technology partners and shifting, or at the very least sharing, the burden of accountability. Today, technology firms whose products either run the applications or whose services are relied upon, are held at higher standards than ever before. When a technology product fails to perform, or if intellectual property information becomes compromised and results in a financial loss to a client, the client may seek legal remedy. Traditional insurance policies may not respond appropriately to changing risk and modern day technology-related problems.
Cyber incidents join Business Interruption as the top risks facing global businesses, according to a survey conducted by Allianz Global Corporate & Specialty (AGCS). For the first time, cyber incidents join Business Interruption at the top of the rankings, also identified by 37 percent of respondents as on of the three top risks, said Allianz, explaining that cyber incidents include cyber crime. IT failure/outage, data breaches, fines and penalties, which are increasingly resulting in significant Business Interruption losses of their own. You develop enterprise labor force software to integrate with a client’s HR and payroll systems. Your company falls behind in delivering the work, resulting in missed milestones and nonfunctioning project modules. Your firm contend that the client repeatedly changed the size and scope of the project. Ultimately, the client fires you and files a lawsuit, seeking to recover lost profits due to the disruption.
What does Technology Insurance Cover?
Business insurance policy forms for technology firms vary widely, one of the most important component of a technology firm’s business insurance program is having a comprehensive Technology Errors & Omissions Liability policy which is specifically tailored for today’s high-tech companies. It protects your bottom line against damages that you must pay because of economic loss arising out of your products or your work that is caused by an error, omission or negligent act. Claims and suits for such damages — not covered under a commercial general liability policy — could be catastrophic.