According to reports, almost seventy percent of small technology companies have gone out of business within a year of commencement due to major data breaches. The most feared breach in the technology industry is that of data and the consequences that the company will have to face due to data breach often can shut down small companies.
All technology companies need to have insurance in place to protect their company from threats that can affect the sustainability of the company. Let us have a look at some of the most essential technology insurance that technology companies should have.
Cyber Liability Insurance
Cyber attacks on technology companies are always a threat and all tech companies have to be prepared to counter such attacks.
Even if all necessary precautions and security measures are in place, the risk of cyber attacks still looms large. By opting for cyber liability insurance, you will be able to protect your company from claims that you will have to face due to cyber attacks. Some of the solutions cyber liability insurance will provide are
- Public relations
- Fraud resolution services
- Crisis management
- Breaches in customer information
- Monitoring of credit of affected customers
- Call center services or other notification services to provide information to clients about the breach.
- Any PCI costs or fines
- Regulatory defense costs
- Sending notifications to customers in foreign countries
General Liability insurance
All companies including technology companies should have general liability insurance to protect them from any claims raised due to injuries or damage of property or leased premises.
Any injury that might happen to a customer in the premises of the company or any type of security breach can cause claims to be raised against the company. To protect the company from such claims, general liability insurance is required.
Professional Liability Insurance
In the technology industry, professional liability insurance is commonly called‘ errors and omission’ insurance. Professional liability insurance is one of the most important insurance policies for technology companies.
This policy will protect the company from litigations that have occurred due to professional mistakes or negligence. Claims that arise due to loss of data pertaining to clients, system failures, software failures or non-performance are covered by this insurance.
As technology companies provide highly specialized services and work with data that is critical and sensitive, professional liability insurance is important. Any error done by the tech company can hamper the functioning of the clients’ business and this can lead to litigations.
Liability insurance policies will help to protect tech companies from such litigations where the settlement costs will be very high.
Property Insurance and Workers’ Compensation Insurance
Tech companies need to safeguard their employees and their property. To protect the company’s property, property insurance can be availed. This insurance will cover all equipment, furniture, and other materials present in the company’s property.
Workers' Compensation Insurance will help provide coverage to all employees in the company. Many states and countries require all companies to have this insurance in place if there are more than two employees working in the company.
This insurance will help provide cover to employees should any injury be caused to them while working in the company.
The technology industry is fraught with risks, especially concerning data breaches, which can lead to significant financial losses and even the closure of small companies.
To mitigate these risks, technology companies must have comprehensive insurance coverage tailored to their unique needs.
Cyber Liability Insurance is crucial in safeguarding against the increasing threat of cyber attacks.
Despite robust security measures, the risk of data breaches persists, making cyber liability insurance essential for covering costs related to breaches, including customer notification, public relations, and regulatory defense.
General Liability Insurance is necessary for all businesses, including technology companies, to protect against claims arising from injuries or property damage.
Given the potential for accidents or security breaches, general liability insurance provides crucial financial protection.
Professional Liability Insurance, also known as errors and omission insurance, is particularly vital for technology companies.
It shields businesses from lawsuits stemming from professional mistakes or negligence, such as system failures or data loss, which can have severe repercussions for clients.
Property Insurance and Workers' Compensation Insurance are essential for safeguarding company assets and employees, respectively.
Property insurance covers equipment and materials, while workers' compensation insurance provides coverage for employees injured on the job, ensuring compliance with legal requirements and protecting both employees and the company.
By investing in these essential insurance policies, technology companies can mitigate financial risks associated with data breaches, liability claims, and workplace injuries, safeguarding their operations and ensuring long-term sustainability in a rapidly evolving and increasingly digitized business landscape.
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