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
- Internet Service or Access Providers
- Web Designers and Consultants
- IT Service Companies
- Software Developers
- Data Storage Companies
- 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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