Cyber Insurance VS Technology E&O

Cyber Insurance VS Technology E&O

There has often been some confusion about whether a company needs to have Cyber Liability or Technology Errors & Omissions Insurance. The answer really depends on the type of business. 

Every company who uses technology should have a Cyber Liability Insurance Policy. Cyber Liability protects against more than just having customers information exposed. Many businesses rely on technology to function. With that comes a lot of opportunities for something to go wrong. 

Below are a few examples of Coverage on a Cyber Liability Policy.

  • A hacker breaks into your system and uses the access to push malicious code into a vendor or a client’s system.

  • A Denial of Service Attack locks you out of your system. No access to billing or client information until a ransom is paid. 

Technology E&O Insurance plays a different role. It is meant to cover businesses whose products or services are related to technology. This would include 

  1. Internet Service or Access Providers
  2. Web Designers and Consultants
  3. IT Service Companies
  4. Software Developers
  5. Data Storage Companies
  6. All of these companies have exposures that would require a Technology E&O Insurance Policy. 

A common General Liability Insurance Policy is meant to cover damages that result in Property Damage and Bodily Injury.Technology E&O Insurance is meant to cover incidents that result from an error or omission by the insured business that results in an economic or financial loss to a third party. 

Here are some examples of this:

  • A programming error from a web consultant disrupts a clients website and does not allow them to transact business as usual, resulting in a loss of income and or clients.

  • An IT service provider fails to install patches in a timely manner resulting in a security breach for their client.

By having the correct type of coverage in place a business can avoid the potential financial consequences of a Cyber or Technology related claim. Determining what kinds of coverage is needed is essential for this to be effective. 

Consulting a qualified Insurance Professional can go a long way to making sure that your business is covered effectively.

 

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