Technology professional liability insurance

A tech professional liability policy provides liability coverage related to:

• Errors and oversights
• Delayed or undelivered IT services
• Breach of contract
• Data breaches and cyberattacks
• Intellectual property and media liability (for certain professions)

Technology companies are often in a position where a simple mistake can have a tremendous financial impact on their clients. For example, a web developer's coding error could cause a client's website to crash on a product launch day, causing the loss of thousands of dollars in revenue.

Forces outside of your control could lead to a missed deadline or unanticipated project delays. For example, the loss of a key employee at your computer repair shop could result in several laptops not being returned to customers by a promised time, and a potential lawsuit.

You sign contracts with clients in good faith, but an unexpected disaster could lead to a broken contract. For example, if a managed service provider (MSP) suffers a DDoS attack, their clients could be forced to deal with hours or even days of downtime. If that downtime costs them money, the result could be a lawsuit.

Third-party cyber liability insurance protects you when a client holds your business responsible for a data breach or cyberattack, and it's included in tech professional liability.

For example, a cybersecurity company might fail to patch a known vulnerability in a client's computer system, which leads to a data breach. The client could sue the cybersecurity business to recoup customer notification costs and other losses.

Tech companies that publish online content, such as web designers and app developers, should make sure their professional liability policy includes coverage for intellectual property (IP) and media liability claims.

IP claims involve trademarks and copyrights, such as a competitor who claims you stole or copied their software. Media liability insurance covers lawsuits related to published content, such as an image of a person shared on social media or a website that results in a privacy violation claim.

Professional liability insurance covers costs related to the quality of your work, such as a lawsuit over a missed deadline. On the other hand, general liability insurance pays costs resulting from common third-party (non-employee) accidents.

For example, a general liability policy can help pay for legal fees from:

• Bodily injuries
• Property damage
• Defamation, such as libel or slander
• Advertising injuries, such as copyright infringement

Small businesses often need the protection offered by both insurance policies to cover the range of lawsuits they might encounter.

Technology professional liability insurance covers a broad range of risks for tech companies and contractors, but it doesn't provide all the protection you need. You may want to contact an insurance agent to make sure your coverage matches your risks.

Other policies commonly purchased by technology experts include:

General liability insurance: This policy covers costs from everyday accidents, such as a client who trips and suffers an injury at your office. You can often bundle it with commercial property insurance for savings in a business owner’s policy (BOP), or add electronic data liability coverage to protect against loss of data.

Cyber insurance: Standalone cybersecurity insurance protects your own company’s data, such as clients’ credit card numbers and email addresses. This policy can include business interruption insurance to cover business income loss related to data breaches and other cyber risks.

Workers’ compensation insurance: This policy covers medical treatment and disability benefits in the event of an employee injury. Most states require technology businesses with employees to purchase workers’ compensation.

Commercial auto insurance: This insurance coverage is required in most states for vehicles owned by a tech company. It can cover property damage and medical bills in an accident involving your company vehicle, along with vehicle theft and vandalism.

Fidelity bonds: A fidelity bond compensates affected clients when an employee at your business engages in fraud, theft, or other dishonest acts. You may need a bond to sign a contract with a client.

Are you ready to protect your information technology business with professional liability insurance? Complete Insureon's easy online application to get quotes from top-rated U.S. insurance companies. A licensed agent can help make sure your coverage fulfills requirements and matches your business needs. Once you find the right policy, you can begin coverage and get a certificate of insurance in less than 24 hours.