Over the past 25 years, the internet has changed the way we live our lives. It has also changed the way we do business. When the internet and our computer systems are down, business can often comes to a standstill for many companies.
With the growth of the internet, has come an explosion in technology companies offering services such as custom programming, website development, systems integration, software development, computer systems consulting and sales of hardware and software. These technology firms are dealing with computer systems that are the backbone of a company as well as sensitive data such as social security numbers or private medical files. When something goes wrong, the results can create major problems and lawsuits for the IT companies who provide these various services.
As an example, a small New York company released their latest software update. When their customers installed the product, their computers crashed. They were sued for hundreds of thousands of dollars by their customers who could not conduct business without their systems being intact. In another case, a website designer launched a client’s new website but did not realize that critical content had been deleted. This created a liability exposure for the client, who sued them for restitution. These are just two examples of exposures that companies would not have had to deal with in the past.
Technology companies need to take the extra steps to guarantee that they are insured against lawsuits that can arise from data breaches, software failures and employee negligence, to name just a few examples. It is important to work with an independent insurance agent like Berkely Brokerage Corp., to make sure that the right insurance coverage is put in place. We will take the time to get to know your business and explain the risks you may be exposed to in your line of business.
The following are Insurance Policies that New York IT companies should consider:
Technology Errors & Omissions – This will protect your technology company from claims and the resulting lawsuits if a client holds you responsible for programming errors, poor software performance or failure to perform work as outlined in a contract. These types of claims are not covered by your general liability policy. An alleged failure of a product or service that results in economic loss to a client can result in costly lawsuits and reputational damage. The costs of technology professional liability claims such as breach of contract or negligent performance average more than $200,000, making this one of the most significant risks for technology companies today. Almost any tech professional has the potential to make a minor mistake that can lead to a major lawsuit. That is why it is recommended that Technology E&O coverage is put in place prior to a product launch and/or before you acquire customers. This coverage will also cover the cost of legal defense even if the allegations are baseless. The cost of the annual premium will most likely be a lot less than the damages of a lawsuit.
Cyber Liability Insurance – This type of insurance coverage is designed to protect your New York company against liability and expenses caused by the theft or loss of data. It will also cover liability and expenses arising from a breach of data security or privacy, particularly when you are hosting client information. Even if your client carries this coverage, it is important that technology firms have their own policy as well.
Business Owners Policy – This will package property and general liability coverage into one policy. Property insurance will cover loss and damages due to events such as theft, fire or vandalism. Business property is usually defined as buildings and contents, equipment and inventory. General Liability coverage will protect against third party property damages and injuries that occur on your business premises, such as a client tripping and falling. It will also protect you against liability suits caused by your business operations away from your premises.
Workers’ Compensation Insurance – This is legally required in most states, including New York, and covers the cost of injuries and illness sustained by you or your employees while on the job.
Business Automobile Policy – Will protect against property and liability damages to vehicles owned or leased by the company.
Disability Insurance – Will provide disability income to you or your employee while you are ill or disabled and cannot work for an extended period of time.
Each technology company is different and so their insurance needs will differ. Berkely Brokerage Corp. will take the time to get to know you and ask the right questions to help determine the proper insurance coverage for your business. We will also be right by your side to guide you through the claims process should you experience a loss. We will help to get things settled as quickly as possible so that you can get back to running your business. Just as you are the technology experts, we are the insurance experts! Why try to figure all this out on your own, when we are here to help you? Give us a call today and let’s get started.