OMI Technology & Start Up Insurance
Insurance Technology & Start Up Companies
What Policies Do Tech Companies Need?
While every business has a specific set of insurance needs depending on its size and industry, there are certain insurance policies that technology companies should consider to be mandatory parts of their business insurance program:
Directors and Officers (D&O) Insurance
Technology Errors & Omissions (E&O) Insurance
Cyber Liability Insurance
Employment Practices Liability Insurance (EPLI)
Example technology professions we can provide cover for
Application service providers & trainers
Computer consultants
Computer programmers & developers
Database administrators/designer
Hardware installation experts
IT project managers
IT consultants & advisors
Software & SAS developers
System designers
Website developers
Directors and Officers (D&O) Insurance:
Covers defense costs and damages (awards and settlements) from wrongful acts, allegations, and lawsuits brought against your company’s board of directors and/or officers. It’s a type of insurance that was designed for the purpose of protecting your company directors (both current and past) from lawsuits and litigation.
In tech companies, the personal assets of the directors and officers are often at risk, which is why most tech companies and startups start their insurance programs with this type of insurance, as it is absolutely mandatory to have so that these assets are properly protected.
It is common to see professional investors working with technology companies request a seat on the board of directors. To reduce their risk, investors usually won’t consider putting money towards tech companies that do not have D&O insurance.
Technology Errors & Omissions (E&O) Insurance:
Considered one of the most important insurance types for tech companies because it defends your company if your service or product does not perform the way that it is supposed to perform. Most businesses would be able to simply buy product liability insurance to cover themselves in the event that their product fails in some way or another.
However, products such as software are not covered by these types of policies, which is why a special type of insurance is needed. A tech E&O policy is going to cover not only liability losses but property losses that are related to the performance of your product. Many business owners tend to confuse technology E&O insurance with cyber insurance, but differences exist.
Technology E&O insurance is designed to cover financial losses that a customer incurred as a result of any errors or omissions related to the service or product that your company provided to them, while cyber insurance focuses on sensitive data.
Cyber Liability Insurance:
Covers first-party costs associated with a data breach, including forensics, notification costs, and credit monitoring. This type of insurance also protects from third-party lawsuits involving various network security and privacy-related losses and protection against costs related to cyber extortion, regulatory fines and penalties, and PCI fines, penalties, and assessments.
A good cyber insurance policy should cover the costs of defending or settling a lawsuit if you are sued by a client or partner whose data was breached because of something your company did or failed to do. It should also cover all of the financial losses the customer incurred as a result of the data breach.
The more robust cyber insurance policies will cover both first and third-party damages and should work hand in hand with your technology E&O policy and more traditional types of related business insurance, such as commercial crime.
Employment Practices Liability Insurance (EPLI):
Provides protection against employee claims related to issues such as
wrongful termination,
harassment, and
discrimination.
Totally different to Employers Liability, EPL insurance might be easy to overlook, especially for small tech companies who don’t believe that they have enough employees to warrant such a policy.