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Technology Insurance — One Size Doesn’t Fit All

Miranda Childers
Miranda Childers
Holmes Murphy

Think your Technology Professional Liability policy covers all products and all services? If you answered yes, you may want to check it, because when it comes to technology organizations and insuring them for the products and services they provide to others, one policy does not necessarily provide coverage for all services. On top of that, insurance policies may overlap with others. It can get confusing fast!

I’ve done my best to outline below what you may want to look out for, but if you have any questions, please don’t hesitate to reach out to us.

Standard Technology Errors & Omissions Policy

A standard Technology Errors and Omissions (E&O) policy will respond to claims alleging negligence or breach of duty either in the performance of an insured’s technology service or the performance (or failure) of the insured’s technology product — both of which are broadly defined within each specific policy.

While in the world of Professional Liability no two policies are the same, the language generally includes computer hardware, software, firmware, electronic equipment (products), and electronic & computer-based services. It’s intended to be broad as it relates to Technology.

Company Structure Changes Will Impact Your Cyber Insurance Policy

So, what if your organization acquires a company that provides additional services to complement your existing technology platform?

  • What if you sign a contract to perform services slightly outside of your traditional scope?
  • What if your company offers a SaaS telehealth app to clinics and now you want to employ the healthcare professionals in house?
  • Or, what if you are an IT staffing firm and you now also decide to be an HR and accounting staffing agency?

All great questions. And the answer varies. Now, add insurance claims into the mix, and it becomes even more confusing.

In situations where claims are involved, sometimes a technology company’s product or service may involve another insurance policy. For example: If technology for monitoring a pacemaker failed to perform, the failure could tragically end in death. Because standard Professional Liability policies do not provide coverage for bodily injury/property damage, this type of claim would likely involve both the company’s General Liability policy as well as their Technology Professional Liability insurance policy. Making sure these two policies will work together in a common claim scenario (which likely includes placing them with the same insurer) is very important.

Weeding Through the Complicated Topic

If it sounds complicated, it is. So, what can you do? Talk to your broker!

There are solutions, and the solutions really do vary by insurance carrier, product, and service. Many Technology Professional Liability policies have an option to define specific professional services that don’t otherwise fall within the technology products/services definition.

If your underwriter is unwilling or unable to add to your current policy, a separate policy may need to be purchased. In the case of claim scenarios involving two policies, your broker should be communicating with underwriters for both policies to be sure they’re in agreement with how a claim involving both would work.

It’s also possible to add contingent bodily injury/property damage to the Professional Liability policy. The key is you need to be working with a broker that has this discussion about your products and services at every mid-year and annual proposal meeting. And, quite honestly, if your broker isn’t already asking you these questions on a regular basis, it might be time to find a new one.

As I mentioned, this is a complicated topic. If you have questions, please don’t hesitate to reach out.

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