General, Professional, and Cyber Liability Insurance
Technology Companies have enormous risks. Those risks depend upon whether the business sells or services technology products. Some businesses store data about the businesses customers. Other businesses create technology that other businesses use to store the data of those customers. No matter what type of risk a business faces, there are three types of liability insurance all technology companies should secure. Those policies are General, Professional, and Cyber Liability Insurance.
General Liability Insurance
General Liability Insurance for Small Business is the most important type of insurance policy a company can secure. General Liability Insurance helps policyholders from the third party risks associated with lawsuits and other types of claims. Those claims include bodily injury and property damage that is caused by direct or indirect actions of the insured. For most businesses a general liability claim can be for something as simple as a customer slipping on wet floors inside a restaurant or when when a product sold breaks and causes an injury. For technology companies, General Liability Insurance will cover legal expenses when a business is sued for customer injuries, property damage, and slander. For many within the insurance industry, general liability insurance is referred to as the first line of defense for a business. It should not be the only coverage a business secures.
Professional Liability Insurance
Professional Liability Insurance is also referred to as Errors and Omissions Insurance. Professional Liability Insurance is coverage for professional businesses that give expert advice or provide technology services for a fee. The coverage prevents businesses from bearing the full cost of defending against a negligence claim made by a client, and damages awarded in a civil lawsuit.
Here are five types of claims that are commonly covered by a Professional Liability Insurance Policy:
- Breach of Contract: Breach of Contract that occurs when one or both parties do not live up to a contract that was previously agreed upon.
- Fraud: Fraud occurs when one party intentionally lies or deceives for financial or personal gain.
- Negligence: Negligence occurs when one party fails to use reasonable care that results in damage or harm to another person, business, or organization.
- Breach of Warranty: Breach of Promise occurs when a person or business promises something to a customer in a warranty, and the business is unable to keep the promise made by the product or contract.
- Misrepresentation: Misrepresentation occurs when a person or business makes a false claim to convince another person or party into a contract.
Cyber Liability Insurance
Cyber Liability Insurance covers the insureds liability for damages that result from a data breach. It does not cover immediate response costs that a business faces after a data breach. A Cyber Liability Insurance Policy is a type of insurance that protects businesses that sell and service technology. A data breach can result from something as small as an employees laptop being stolen while going to the bathroom at a coffee shop, but it can also result from an employee clicking on a phishing email. Data breaches are no longer just a problem for bug businesses. Both the Target and Home Depot Data Breaches started by hackers first accessing the computer systems of a small business who were partners with the bigger business. As most enterprise level business take cyber security more seriously, this is becoming a much more common way for businesses to become victims of a data breach.