Technology Liability Insurance

Technology liability insurance, also known as technology professional liability insurance or technology errors and omissions (E&O) insurance, protects tech businesses from the unique risks they face. As these companies provide specialized services and products, they are vulnerable to lawsuits caused by errors, omissions and data breaches. Tech company insurance protects these businesses in the event of claims related to negligence, breach of contract or failure to deliver promised services.

Technology professional liability insurance covers a range of scenarios that could lead to financial loss or legal action. Here are some of its key coverages:

1. Errors and omissions: These policies cover mistakes made during the execution of services, such as software glitches, coding errors or incomplete project deliveries.
2. Data breaches: If a company's services lead to a breach of sensitive customer information, tech liability insurance helps cover the costs associated with legal fees, settlements and even public relations to rebuild reputation.
3. Intellectual property infringement: Technology companies often deal with intellectual property — any unintentional infringement on patents or copyrights could lead to costly lawsuits.
4. Negligence claims: If a client sues for professional negligence, claiming your services did not meet the expected standard of care, these policies help cover legal defense and any resulting damages.
5. Breach of contract: Sometimes, clients claim that the technology or services provided did not meet the agreed-upon terms. Information technology insurance covers costs related to breach of contract disputes.

Here are some of the main benefits of technology professional liability insurance for tech companies:

• Financial protection: IT liability insurance provides financial support to cover unexpected expenses like legal fees and settlements.
• Client trust: Having technology insurance shows clients that you take your business seriously and have measures in place to handle potential issues.
• Business continuity: Lawsuits and claims can disrupt operations. With technology liability insurance, you can focus on running your business while your insurance provider manages the legal aspects of the claim.
• Coverage for multiple risks: Tech company insurance covers not only lawsuits but also costs related to data breaches, intellectual property claims and more.
• Customized policies: Many top business insurance providers allow businesses to tailor their policies based on their specific industry needs.

Any business providing technology services or products can benefit from technology services liability insurance.

General liability insurance primarily covers bodily injury, property damage and general business risks. It is designed to handle accidents like slips and falls or damage to a client's property while on your premises. Meanwhile, technology liability insurance specifically addresses the unique risks that technology businesses face, such as software failures, professional negligence or data breaches.

Additionally, IT liability insurance provides coverage for financial losses resulting from errors, omissions or breach of contract claims, which general liability policies do not typically cover. For example, if a software implementation leads to system downtime, tech liability insurance would cover the damages, whereas general liability insurance would not.

The cost of technology liability insurance depends on several factors, including the size of the business, the type of services offered and the overall risk exposure. For small tech companies, technology professional liability insurance typically costs around $67 per month.

Companies dealing with sensitive data, such as IT consultants or cybersecurity firms, may see higher premiums depending on their exposure to risks like data breaches or intellectual property disputes.