Does Your Company Need 'Tech Insurance'?

Tech insurance - or Technology Insurance -  is a specialized form of business insurance.

The questions is .... how can you tell if your company needs Tech Insurance, and not just a generic business insurance policy? 

It’s confusing. 

Because – from the outside – insurance policies (like fortune cookies) all look the same. Except that when you look at what’s written on the papers inside ..… that is usually different.

Fortunately, there is an easy way to tell:

You need tech insurance if your company offers information technology services or products.

To make sure we’re on the same page … let’s clarify:

By Technology Services we mean computer and electronic technology-based services that your company does for others (your clients) for a fee, including:

  • technology consulting and training,
  • data and application hosting,
  • data processing,
  • internet services,
  • computer systems analysis,
  • custom software programming,
  • computer and software systems installation and integration,
  • computer and software support
  • network management.

Technology Products, on the other hand, refers to:

  • computer or telecommunications hardware or software products, or related electronic products that are created, manufactured or developed by your company for others, or …
  • licensed, distributed, leased or sold by your company, including software updates, service packs and other maintenance releases provided for such product.

Looking at the above list, it’s really not hard to see how, by delivering “technology services and technology products”, your company’s risk exposures are different than the risks faced by, say an accountant, an architect, a naturopathic clinic or a restaurant.

A restaurant owner, for example, would be concerned about being sued for liquor liability or food contamination liability.

But – would a restaurant owner be concerned about causing damage to others with errors made in software programming’?

Makes sense, right?


It is precisely because of those different “risk exposures” that some insurance companies have developed specialized products to help protect businesses like yours from financial ruin.


Remember

It's up to you to ensure that you have the right type of business insurance, so that you’ll never have that nagging doubt about what would happen if you did have a serious professional liability lawsuit in your hands.

In addition to Commercial General Liability insurance, a modern technology insurance policy package must include - amongst others - such crucial types of coverage as:

Your specific company may need other types of coverage and higher (or lower) coverage limits ($) depending on, for example:

  • its type of operations (products or services), 
  • its revenue size, 
  • the industries your clients are in,
  • etc.

Bottom line, if your company provides technology services or products (as described above), then it needs tech insurance (and not just a generic business insurance policy).


Remember, having insurance is *not* peace of mind.

Having the right insurance is.

Look, perhaps you are sure that your current business insurance policy is the right one, meaning .... that it covers what your business needs, such as: work done by your subcontractors, your tech services and tech products, cyber exposures, network and media liability, etc.

If that’s the case, congratulations!

But if you are harbouring even the smallest doubt, we’d love to help put your company on the right track. Every day you don’t act on this you run the risk of unpaid claims. Who’d want that?




Eddie Rodriguez, CAIB, R.I.B (Ont) 
Eddie is a Risk Management and Insurance advisor specializing in Business Insurance for Information / Telecommunications / Network Technology Companies.
Connect with Eddie on LinkedIn







Insuring your tech business is now easier than ever


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