Professional Liability for Tech Companies: The One Thing You Need To Know!
Posted by Tech Insurance Solutions on
What you may not know about professional liability for tech companies…
As a business owner needing Tech Insurance, most likely, Professional Liability coverage is going to be on the top of your list. And rightly so! This fantastic policy protects your business from liability claims customers may make against your business. This could include disputes regarding breach of contract, negligence, misrepresentation of your work or the performance of it.
However, did you know this specific coverage line or policy is often “triggered’ differently than per say your General Liability policy.
Occurrence vs. Claims-Made Coverage
In most cases, your General Liability is an Occurrence policy, meaning you are covered for an incident that “occurs” during the policy period regardless of when a claim is filed. Therefore, even after your policy is out of force, with an Occurrence policy, the policy will take care of any incidents that come in as long as they occurred during that specific policy period in which coverage was in force.
This is NOT the case with Tech Professional Liability since it is often a Claims-Made Policy. Coverage is “triggered” for claims only when BOTH the alleged incident AND the resulting claim happen during the policy period in force. This type of policy continues to provide coverage only if you pay premiums for the initial policy and any subsequent renewals. As you continue to pay premiums each year for the policy and the policy renews, the “coverage period” is extended due to the continuous coverage from policy inception. Yet, when premiums stop to be paid, coverage stops. Claims made against the policy after the coverage has stopped will not be covered regardless if the incident occurred when the policy was in force.
How This Can Impact You
All in all, this could be troubling if you have been in business for a bit of time and then look to purchase Professional Liability as a first-time buyer. Potentially there could be no coverage for any incidents that occurred before the inception of the policy and results into a claim. We must remember, coverage is “triggered” for claims only when BOTH the alleged incident AND the resulting claim happen during the policy period in force.
Also, if you’re a Tech business or consultant that has had Professional Liability from the start and possibly you have changed insurance carriers once or twice in the interim, are you confident that your current Professional Liability policy is covering you from the start date of your business? This may not be the case!
As cyber breach risks continue to increase, more and more businesses are concerned about their cyber liability exposure. Often, they know they need cyber liability insurance, but lack guidance on what should be covered or on how much coverage may be needed. Surely, a doctor’s office is going to have a much different exposure risk than a furniture store, and so on.
Where can we start?
This is a fantastic tool to help businesses to examine and ascertain the potential risk that they have and what it could ultimately cost them with a data breach. The calculator allows a business owner to generate a hypothetical scenario and estimates a data breach cost on the type of information lost, such as PII (Personally Identifiable Information), PCI (Payment Card Information or Industry), and PHI (Protected Health Information).
It’s truly an eye-opening experience using this calculator as it helps you to see cost related to:
Class Action Lawsuits
Customer Notification/Crisis Management
All from inputting a bit of information about your business and the extenuating circumstances that may impact such a breach. This nifty tool can begin the conversation of how much coverage truly might be needed under your cyber liability insurance policy.
We’re proud to say that our carriers offer the full version of this calculator as well as many other helpful tools and resources provided by eRiskHub as a bonus to our policyholders. Tech Insurance Solutions is dedicated to helping businesses with Cyber Liability Insurance and other business insurance needs.
Email me today to set an appointment to receive the guidance you deserve to protect the things that matter most. or message us today to receive the guidance and advice you deserve in such scenarios and receive immediate coverage to fill those gaps for your Tech Insurance!