Web Developer Insurance
What You Need to Know About
Insurance for Web Developers
For the past 10 years, RJ Ahmann Company has been a premier provider of insurance for Web developers nationwide.
Why is insurance for Web development companies different from other businesses?
Since the mid-1990s, Web development has been one of the fastest growing industries in the U.S. Web developers work with a broad range of issues, from pure communication to e-commerce. The legal liability exposures of Web developers are rapidly evolving, with litigation becoming a more high stakes game than ever before. A well-designed Web developer insurance program must contemplate a range of exposures and possible penalties beyond those of a typical business.
A complicating factor is the differing sizes and capabilities of Web development companies. Some employ thousands of specialists with deep knowledge of narrow areas and some are generalists working out of their homes providing services to small businesses.
Web development companies need protection against lawsuits resulting from a host of potential issues. Many of these issues result in alleged errors or omissions on the part of the developer. For example:
- A claim that alleges the company's Web site product or service misdirected a client's potential customers, resulting in loss of income.
- A security breach leading to alleged failure to protect confidential information. A number of states have laws mandating actions that companies must take steps to identify, notify and monitor credit for anyone whose privacy was compromised. Complying with these laws can result in considerable expense.
- A key concern is copyright or trademark violations, which can be unintentional or even be caused by outsiders posting comments on a site.
- The failure to prevent the transmission of a virus, causing loss of data, is another concern.
Because Web development companies often provide global products and services, working with an agent who understands the international insurance and legal environment is a critical component of a sound insurance program.
What kind of insurance is needed by Web site design companies?
Like all companies, Web designers and Web development companies need the standard coverages of property, general liability, auto and workers' compensation. Extending the property coverage to incorporate protection against perils unique to electronic equipment is advisable. In addition, Web site service companies may need specialized protection regarding the following issues:
- Errors and omissions (E&O) relating to design work
- Network and security breaches
- Cyber liability
- Computer virus transmission to others
- Invasion of privacy and failure to protect data, particularly relating to new state regulations regarding customer notification in case of a breach
- Denial of service
- Unauthorized access
- Copyright and trademark violations
The average cost of notifying customers of a security breach is $8 per record; a breach affecting 100,000 customers could cost $800,000 just for notifying them.
Some important questions that drive the design of your program include:
- How often are your staff members working at a customer's premises?
- Do they have access to the customer's IT systems?
- Does such access allow them to create issues for you, like third party crime and employee harassment?
Who should have specialized Web design insurance coverage?
To control the risk of a wide variety of exposures, most Web development businesses maintain specialized Web developer insurance coverage. This coverage should be customized to the type of Web development work your firm performs. Many times, clients will demand that you carry specialized coverages at specified limits of liability. These requirements vary by the size and complexity of the assignment, and can periodically be subject to negotiation.
Regardless of what your customers demand, the first obligation of your insurance program is to protect your business against catastrophic losses. To provide this protection, your agent must have the specialized knowledge and access to insurance carriers to design and place tailored protection.
A smart solution
If you need insurance for your Web site development company, or if you just want to learn more, RJ Ahmann can help. Based in the Minneapolis area, with hundreds of clients in the technology industry, our highly trained and experienced staff will negotiate with major technology carriers to secure customized coverage extensions for your Web development business.
To ensure that you get the strongest Web developer insurance protection at the best rates, we are...
- Unsurpassed in our technical expertise for developing tailored insurance programs for Web developers.
- Recognized as technology insurance experts by all major technology insurance carriers.
- Designated as a preferred provider by the Minnesota High Tech Association and LifeScience Alley.
- The only Minnesota member of TechAssure, an international association of technology and life science insurance specialists.
- A Cornerstone Chubb agent and a VIP Travelers agent, which allows us to negotiate more effectively on your behalf.
Ready to Learn More? RJ Ahmann is Ready to Help with Web Developer Insurance Solutions!