April 20, 2024

What Types of Insurance Does a Tech Company Need?

No matter the size or type of business, you need the appropriate insurance to safeguard your assets. An experienced broker or specialist will understand your specific requirements and work together with an insurer to find you the most competitive rates on coverage.

Tech businesses face unique risks and require tailored insurance solutions. Additionally, they’re vulnerable to rapid technological change, making it essential to review your coverage periodically.

Product Liability

Product liability insurance shields your business against claims that a product you manufacture, distribute or repair has caused injury to someone. It also covers legal fees and compensation awarded to victims of product-related harms.

Manufacturers are typically the targets of product liability lawsuits, but distributors and suppliers can also be held liable for defective items they supply. If your tech business produces, distributes or repairs physical products with a presence in the supply chain, you should consider adding product liability coverage to your business insurance portfolio.

Online quotes are the fastest and simplest way to determine what type of policy you require. But be sure to double-check them with a customer service representative before finalizing your purchase. Moreover, look for insurers with product recall endorsements.

Cyber Liability

Cyber Liability Insurance is an essential policy for tech companies that store, send or receive personally identifiable information (PII). PII includes data such as names, social security numbers, credit card information and medical records.

Hackers with access to this information can use it for financial gain or harassment of businesses, damaging both their reputation and finances.

A cyber liability policy provides protection from losses caused by a cyber attack or other IT incident, including costs to repair data and systems, ransom payments and customer notification. It may also cover legal fees from civil suits or regulatory fines.

Cyber liability policies can be purchased independently or combined with another insurance type. Many insurers provide this coverage, such as AIG, Chubb and Liberty Mutual.

Directors & Officers (D&O) Liability

Directors & Officers (D&O) Liability Insurance provides protection for your company’s leaders. Whether you are just starting out, running a mid-sized business or have gone public, having D&O coverage is essential for leadership to have in place.

D&O liability insurance shields a company’s directors and officers from lawsuits over decisions they make while in their roles. In the event of a lawsuit, your D&O policy will cover legal fees as well as other costs associated with the proceeding.

Furthermore, D&O insurance will shield your directors and officers from personal financial losses in the event they’re sued by an entity. For instance, if an investor files suit against them over a failed joint venture, your D&O policy will cover their legal defense fees.

Contrary to what some may believe, D&O liability claims can affect all types of businesses with a board of directors or management advisory committee – from profit and non-profit enterprises to educational institutions.

Employment Practices Liability

Employment practices liability insurance (EPLI) shields employers from the cost of employee claims. It covers defense costs and damages from lawsuits involving discrimination, sexual harassment, wrongful termination or other employment-related matters.

According to Chris Williams, employment practices liability product manager at Travelers, these claims affect organizations of all sizes and across all industries. Not only can they cause disruption and employee morale to suffer, but they can also tarnish reputations before going to court. In addition, claims may cost companies financially before going to trial as well, according to Chris.

EPLI can be an integral component of your business insurance portfolio. But before you purchase it, it’s essential to comprehend the insurance market and your risk management requirements.

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