How Tech Insurance Protects You
Are you a web hosting company? A game developer, mobile app developer, or a software or small internet service provider?
You are innovators, but innovation is not without risks. You can face threats like cybercrime, intellectual property infringement, and false advertising. A tech insurance package protects you from these threats, among others, so that you can confidently operate your tech or tech startup business.
Do you have a software company on University Avenue or a video game studio on Spadina Avenue? Do you operate a web hosting company on Front Street West, a mobile app company on Bay Street, or a computer support and services company on King Street West?
Toronto is a global hub for IT and new media development. The city’s tech sector employs over 90,000 people and contributes more than $8B in annual employee wages.
Your Western business insurance expert will give you top-notch advice and ways to save on your tech insurance or tech startup package. We’ll get customized tech insurance to protect you and your tech business or startup.
What is tech insurance?
Tech insurance is a package of insurance coverages that protect you from risks such as cyberattacks and cybercrime, third-party liability, and errors and omissions in the service you provide, intellectual property infringement, among other risks.
What types of businesses need tech insurance?
- Web hosting companies
- Alternative internet service providers
- Game developers
- Mobile app developers
- Software developers
- Hardware developers
- IT consultants
- Computer programming
- Data processing
A tech insurance package helps protect you from these 3 claims:
- You’ve developed software for a client who says it has not performed properly. You are sued for financial loss and reputational harm. Errors & Omissions insurance, also known as professional liability insurance, would help protect you if this happens.
2. A client visits your office to talk about a project, but slips and falls on the way out because you haven’t cleared the ice from your sidewalk. The client files a personal injury lawsuit against your business. Commercial General Liability Insurance, also known as slip and fall insurance, could help cover the medical expenses and legal fees.
3. Your software company is developing accounting software for a client, but your system is hacked and the client’s information is stolen. Cyber liability insurance could help with system repairs and legal fees.
How much will my tech insurance cost?
Here are factors that will influence the cost of your tech insurance:
- Type of products sold
- Years of experience
- Annual revenue
- Number of employees
- Past claims
Here’s an insurance check list for tech companies and tech startups:
- Do you have the best business insurance rate for your business?
- Do you have the right amount for your deductible and regularly review to make sure it’s the right amount for your business?
- Is your number of employees up to date?
- Are you using your personal car for business purposes?
At Western, we will save you time and money by doing the insurance shopping for you to find a tech insurance package that suits your business at the right value for you.
What’s included in my tech insurance package?
Commercial General Liability (CGL) Insurance: This type of insurance can protect your tech business or tech startup against common claims or lawsuits alleging third-party bodily injury, false advertising, and libel or slander. If you are sued, CGL may cover legal costs, regardless of the lawsuit’s outcome.
Without CGL insurance, you would be responsible for paying any liability costs out of your own pocket.
It’s not unusual for a tech business to have several million dollars coverage in CGL insurance, depending on what your tech business does. The minimum is usually $1 million.
Technology Professional Liability Insurance (Errors and Omissions): This type of insurance helps cover legal expenses if you’re sued by a third party for causing them a financial loss due to an error, omission or professional negligence related to your services or advice. For example, E & O insurance will help protect you if there’s a coding error in an app you developed and it does not perform and results in your client getting bad reviews. You get sued for financial loss and reputational harm.
Cyber Insurance: Cyber Insurance helps your tech business or startup deal with a cyberattack, data breach, phishing, or ransomware attack. This type of insurance can help recover stolen data and repair damaged computers and networks and it can help restore stolen customer and employee identities. Depending on the size of the breach and the information that was taken, the customers who are affected can sue your business for damages.
Intellectual Property Insurance: It helps tech businesses and tech startups defend themselves against claims of infringement on patents, copyrights or trademarks or their theft.
IP insurance can help cover the legal costs of pursuing infringement or theft of your startup’s intellectual property. It also covers legal defense costs for policyholders accused of IP infringement or theft.
There are two basic types of IP insurance:
Infringement defence: It covers policyholders for infringement claims brought against your tech or tech startup business.
Abatement enforcement coverage: This type of coverage gives IP owners the financial ability to enforce their IP rights and pursue infringement claims.
Business Interruption Insurance: This type of insurance is an additional property insurance coverage that covers loss of income if your business suffers a disaster, and your business premises need to be temporarily closed. This type of coverage can mean the difference between reopening your startup and going out of business.
Commercial Auto Insurance: If you have a business car that you use as part of your business, it needs commercial coverage as part of your tech insurance package. Your personal car or truck insurance usually won’t cover your startup business.
Commercial Property Insurance: This type of insurance can cover losses due to fire or lightning, including removing property to protect it from further damage. You can also include vandalism and malicious mischief as part of your commercial property insurance in your tech startup insurance package.
Crime or Fidelity Coverage: This protection for tech companies for incidents related to employee theft of product, theft of money, counterfeit money or forgery, credit and debit card fraud and funds transfer fraud.
Equipment Breakdown Coverage: If you are dependent on your equipment, this type of insurance covers the costs of repairing or replacing equipment that suffers a sudden or accidental mechanical or electrical breakdown, due to an insured peril.
What do I do if I have an insurance claim as a teach business or startup?
- Contact your broker immediately after any business-related mishap. Waiting to file a claim can confuse insurers about the severity of the damages to your business.
- Know your policy so that when you contact your broker you are familiar with what will be covered or not.
- Document the damage. Take photos right away and write down what happened.
- Do not throw away damaged goods after taking photos. Keep the physical evidence so that your adjustor can see it.
- Do not invite lawsuits. Don’t say anything that could be used against you, especially if you aren’t sure what happened.
- Be honest about what your damaged property is worth. Damaged commercial property is generally valued according to its actual cash value or replacement value.
Western Insurance has licensed BUSINESS INSURANCE EXPERTS to get you the right insurance package if you have a tech business or a tech startup. Our experts are available now to help you navigate the business insurance journey to protect you and your tech business or tech startup.
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