This type is insurance is relatively new in the market. It provides professional technical service providers such as data storage companies, web designers, software designers, etc., protection from claims and lawsuits that may arise if the company fails to perform, execute or deliver the promised services. Technology Services Insurance is similar to E&O coverage. It protects the professionals from complaints that may arise from the day-to-day handling of websites, data, etc., that affect their client’s regular business.
What does technology service insurance cover?
A claim against any technology service may include hacking, theft of client information or client’s customer information, credit monitoring losses, lost income due to failure to abide by the given deadline, or such others. Well-publicized hackings usually take place against big companies, banks, etc., resulting in the loss of revenue, time, and valued customers. While these are done by humans and employees with bad intentions and should be punished for their crimes, the lawsuits are usually against the entire company, which is not morally correct. The company didn’t have any hand in these bad doings.
Other than these human acts, there could be a malfunction in the system’s coding or the drive, which could result in the loss of valuable information and content, or the client could experience loss of productivity. These issues could also lead to a lawsuit wherein the technology company might have to bear significant consequences. Technology Services Insuranceprotects the tech professionals from both of these claims and even more, thus protecting the company from severe losses.
Various types of technology insurance coverage
Some of the common types of coverage that technology insurance provides are:
- E&O
- Data breach coverage
- Business income extension for cloud service interruption
Benefits of having technology insurance
- Legal defense is covered- the insurance pays to defend your claims if a lawsuit is filed against you. Defending these cases from your pocket can be a costly affair and may lead to serious losses to your company.
- Damages are covered- the insurance also gives the money to resolve a claim or monetary judgment passed against you.
- It helps show that you are a responsible business partner- having a good company insure you. Your willingness to pay the insurance cost is a good sign and indicates that your company lacks any malicious intent and is a trustworthy partner.
Getting technology insurance might be a costly affair. Still, it is a one-time investment and helps you stay protected from the risks of lawsuits, resulting in the loss of a huge amount of money, sometimes even making the company bankrupt and thus forcing it to shut down.