Get in touch

Insurance For Technology Companies

✆ Call An Agent Now

8:30am - 5:00pm Mon-Fri

Request an Assessment

Will Reply in 15min*

Top 3 Recommended Policies

By: Dax Kastrin

Owner of Elemental Risk Management

505-933-6511

General Liability Insurance

Property Insurance

Worker's Compensation

Technology, innovation, and IT companies are faced with several business risks every day. The best way to manage and mitigate these risks begins with getting the right commercial insurance policies. Tech companies are at the highest risk of data breaches and cyber-attacks. Therefore, they must have the right policies to help them against these challenges.

But what insurance is needed for technology companies anyway? Read on to find out the different types of insurance policies you must have as a technology company.

What Insurance Is Needed for Technology Companies?

Commercial insurance for tech companies offers them protection against unexpected incidents, such as data breaches, fire, lawsuits, theft, or anything that could disrupt their business.

Whether you are a tech company or an IT and innovation startup, you should have the following types of insurance policies to protect yourself:

1. General Liability Insurance

General liability insurance is important for every business. It is especially essential for tech companies as it offers coverage for the legal and settlement costs in case your business is sued for third-party property damage, third-party injuries, and advertising issues such as slander, libel, and infringement.

General liability insurance is often needed as part of a client contract. It covers both the business as well as the business owner for claims resulting from injuries and property damage that occurred due to the operations of the business.

2. Cyber Liability Insurance

Technology, IT, and innovation companies manage high volumes of sensitive data. Especially companies that are associated with the cybersecurity industry are at high risk of data breaches. All of these companies should strictly consider getting cyber liability insurance.

Cyber liability insurance offers coverage for the costs incurred from data breaches and other cyber attacks at your or the client’s business. Insurance providers often divide cyber liability insurance into two types: first-party and third-party cyber liability insurance.

First-party cyber liability insurance offers coverage for expenses related to a data breach or cyber attack that occurred at your business's systems or networks. On the other hand, third-party cyber liability insurance offers coverage for expenses related to a data breach or cyber attack that occurred at your client's systems or network.

So if your business or your client’s business has been attacked, your cyber liability insurance policy will cover the costs of identifying and responding to the security vulnerability, sending customer notifications, any regulatory penalties and fines that you may face, the cost of credit and fraud monitoring activities, and the cost of managing the crisis and maintaining public relations.

3. Errors and Omissions Insurance

Also known as professional liability insurance, errors and omissions insurance (E&O) offers coverage for all the expenses related to lawsuits filed by your clients in case of late, inaccurate, or unsatisfactory results.

Your errors and omissions insurance policy will cover any accusations of negligence, your failure to deliver the expected results, or any mistakes or oversights that occurred in your offerings.

Many insurance providers bundle cyber liability insurance and E&O insurance policies into technology errors and omissions insurance (tech E&O) to reduce the overall costs. So you will be spending less as compared to buying the two policies separately.

4. Commercial Property Insurance

Commercial property insurance is yet another very important policy for businesses. It pays your business property's repair and replacement costs in case of a fire, misplacement, theft, or damages. It offers coverage for the damages that occurred at your business property as well as all the contents inside it, such as the furniture, inventory, products, electronics, equipment, tools, computers, etc.

This is especially very essential for tech companies as their business properties host highly expensive computers and systems. So commercial property insurance will come in really handy in case of a fire as it will cover the replacement costs of all the computer equipment damaged in the fire.

5. Workers’ Compensation Insurance

Workers’ compensation insurance offers coverage for all the costs related to any workplace-related illnesses or injuries among the employees. It is so important that most states require tech companies to carry workers’ compensation insurance even if they have only one employee.

It covers all the medical expenses as well as the wages lost due to the affected employees’ inability to work.

6. Fidelity Bonds

Fidelity bonds are specially designed for IT, technology, and innovation companies to protect them in case an employee steals sensitive data from a client or their business. It offers liability coverage for fraud, theft, unlawful data, access, and electronic funds transfer. These bonds usually cover the costs of stolen tangible property. So if intellectual property is stolen from a client or you, fidelity bonds won't cover them.

Fidelity bonds are of two kinds: first-party fidelity bonds and third-party fidelity bonds. First-party fidelity bonds protect your business in case an employee steals from you. In contrast, third-party fidelity bonds offer coverage when an employee steals from a client.

These bonds cover all the expenses that are related to the employee stealing from you or the client, an employee committing fraud against you or a client, or an employee committing forgery against you or the client. They are so important that many clients ask tech companies whether they are covered by fidelity bonds before they hire them.

7. Commercial and Hired and Non-Hired Auto Insurance

Tech companies that use commercial or personal vehicles for work must have commercial or hired and non-hired auto insurance. Commercial auto insurance offers coverage for all the costs incurred due to an accident caused by a business-owned vehicle. This includes the cost of property damage, lawsuits, and medical expenses.

While hired and non-hired auto insurance offers coverage for all the costs incurred due to an accident caused by a vehicle owned by you or your employees. It covers leased vehicles, car rentals, employees driving for work, and personal vehicles used at work.

Conclusion

Some other insurance policies that IT, innovation, and tech companies should consider include product liability insurance, employment practices liability insurance, and directors’ and officers’ insurance.

So now that you know what insurance is needed for technology companies get tailored insurance policies from Elemental Risk Management for reliable risk-mitigation solutions for your company.

Request a Quote