Technology Insurance
What You Need to Know About
Technology Insurance
For the past 20 years, RJ Ahmann Company has been a premier provider of insurance for technology businesses nationwide.
Why is insurance for technology companies different from other businesses?
Technology is a complex field where innovation happens daily. With the fast pace of new and unique products and service offerings and rapid growth of worldwide Internet usage, the technology industry faces greater risks than ever before. A well-designed insurance program for a technology company contemplates a range of exposures beyond those of a typical business.
Technology companies often need protection against lawsuits that result from a claim that alleges the IT company’s product or service was flawed and therefore caused a financial loss to another. Security breaches can lead to a variety of legal issues, including lawsuits for invasion of privacy and failure to protect confidential information. A number of states have laws mandating actions that companies must take to identify, notify and monitor credit for anyone whose privacy was compromised. Complying with these laws can result in considerable expense.
Other areas of concern include libel and slander, failure to prevent the transmission of a virus, and infringements of software codes, patents, copyrights and trademarks. Because technology 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 technology companies?
Like all companies, technology companies need the standard coverages of property, general liability, auto and workers’ compensation. In addition, technology companies may need specialized protection as identified below:
- Errors and omissions (E&O) of products and services
- Network and security breaches
- Cyber liability
- Cyber extortion
- Communications and media
- Computer virus coverage for damage to data
- Crisis Management Expense
- Computer virus transmission to others
- Invasion of privacy and failure to protect data
- Crisis management
- Denial of service
- Unauthorized access
- Intellectual property protection
- International coverage
In 2008, the average cost for data breach incidents was $6.65 million. And the most damaging effect is lost business, averaging $4.59 million or $139 per record compromised.
Who should have specialized technology coverage?
To control the risk of a wide variety of exposures, most tech businesses maintain specialized technology insurance coverage. Often times, specialized insurance policies are required to secure a contract. If you own, operate or manage a business in any of the segments below, you should strongly consider talking to a technology insurance specialist:
- Hardware manufacturers
- Software developers, packaged and customized
- Game developers
- Web developers and designers
- Web hosting and management services, including social and multi-media sites
- Telecommunications companies, including Internet service providers
- Networking companies
- IT professionals, including technology management, consulting and servicing
- Medical technology companies
- Contract manufacturers
Common claim examples
- A Web site manager and developer of a media site for a local radio station inadvertently posted an unauthorized image online resulting in breach of privacy.
- A coding failure caused by the IT consultant/service provider resulted in a client’s business interruption and lost revenue.
- A networking company assisting with the installation of a worldwide billing system upgrade accidentally erased critical data.
- A computer assembler was sued after a class action suit claimed the computer did not live up to its advertised specifications. Full refunds were requested.
- A software developer was sued in foreign country courts for consequential damages stating that the software developer failed to deliver a version of software that was compatible with its mainframe systems.
- A hospital relied on a sophisticated computer program to track patients’ medical records. A software failure resulted in record mix up, misdiagnosis and bodily injury.
- A technology management services firm failed to meet contracted deadlines to upgrade the client’s inventory management system due to high turnover in staff and a breakdown in communication of the project management team and client. A large multimillion-dollar settlement resulted.
A smart solution
If you need insurance for your technology 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 on your behalf.
To ensure that you get the strongest insurance protection at the best rates, we are...
- Unsurpassed in our technical expertise and frequently identify coverage gaps and cost-savings opportunities through our contract review assistance and insurance program/policy review.
- Experienced in placing international insurance. We have the international affiliations needed to efficiently assist you with meeting your legal and risk management requirements worldwide.
- Able to assist with specialized loss control and other meaningful value-added services, such as disaster planning, electronic presentations and human resources assistance.
- Recognized as technology and life science insurance experts by all of the major life science/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, allowing us to negotiate more effectively on your behalf.
We have developed numerous insurance programs for tech companies. Our staff has the expertise to develop a cost effective custom program that will protect your business from unique exposures of technology companies. If you are looking for cyber insurance or web designer insurance solutions, contact us today.
Ready to Learn More? RJ Ahmann is Ready to Help with Technology Insurance Solutions.