As technology expands into our lives and business infrastructure, insurance providers are taking steps to create specialized coverage policies that protect against technological risk. This is known as tech errors and omissions insurance and cyber liability insurance. Here, we will discuss two main categories of technology liability.
Cyber liability refers to the risks of conducting business via the Internet, keeping sensitive or critical data on machines that are Internet capable and so forth. In terms of insurance, cyber liability is a type of risk involving information technology and generally is kept separate from other more traditional and generalized liability policies. Common cyber liability policies will cover such things as digital theft, the destruction of data, extortion, denial of service attacks, and hacking.
Cyber liability coverage is becoming increasingly in demand as the threats to technological and digital assets become more prevalent. Because it is relatively novel, many businesses assume that general liability policies will cover losses and damage to technological capital. But this is not often the case. If you don’t know whether or not you have cyber liability insurance, chances are you do not. Even if antivirus programs, firewalls, and other measures protect you, your technological capital is still at risk.
Tech Errors and Omissions Insurance
Technology errors and omissions insurance is a type of coverage that protects the providers of technology products or services. Data storage companies, for example, and web developers provide tech services, whereas the manufacturers of computers and computer peripheral equipment provide tech products. Tech E&O policies protect these product and service providers against losses related to the provision of technological products or services that are caused by network security breaches, digitally corrupted media content and network security breaches. Most Tech E&O insurance policies provide coverage against crisis management expenses, threats of extortion, and the interruption of mission-critical business processes.
Due to the nature of their trade, providers of technology services and products are less likely than other types of businesses to have overlooked insuring their key assets. However, smaller startups and new small businesses working in these fields are more at risk. The proprietors of small tech businesses frequently overlook tech errors and omissions liability insurance. This can be disastrous, especially when the proprietor is still working to pay off small business loans and other start-up expenses.
Cyber Liability and Technology Errors and Omissions Insurance are often confused. But they are distinct and are designed for two different types of business. Cyber liability is designed, mostly, to protect the user of technological devices and service. Whereas, Technology Errors and Omissions is meant to protect the merchant who sells technological products or services.
A single company may have both types of insurance. The important thing is to evaluate your risk profile and obtain the insurance you need to protect your business. To learn more about your cyber risk profile, get in touch with the tech security insurance experts at Brashears Insurance.