Professional Indemnity insurance tops the list of cover sought by Tech firms, mainly addressing the crucial product or service failure risk. For many companies PI is a contract driven policy. Coming next would be that nebulous flux of IPR, cyber liability and data breach risks. Tech companies struggle with these insurance areas. The insurance industry hasn’t helped with multiple cyber and tech policy offerings which make comparisons difficult.
A very important service that every Tech firm should require from its broker is a contract review capability (any broker supposedly expert in the Tech sector should be able to do this, often at no direct charge).
The check list for Tech starts with PI at a decent limit (£2m minimum for the smaller firms, quickly rising to £10m) – and arranged with a market leading tech insurer. Firms should ensure the widest IPR cover, normally not including Patent claims in the US for obvious reasons, to do with insurability. Cyber liability is next on the list but for Tech companies this is to do with “media” risks rather than data breach as the PI policy will often pick up privacy or data breach claims as indirect software performance failings, unless personal data on individuals is stored by the company.
Tech firms will often gravitate to the US market and this means having a US broker network capable of offering help in the arrangement of local policies as well as an understanding of US insurance issues. Innovation Broking is the UK member of TechAssure, the leading global broker association of insurance and risk management experts for technology-related risks.
Specific pitfalls for the Tech sector are in not completing an annual proposal form for PI risks (insurers will go along with this but don’t expect any latitude on claims), inadequate limits of liability for PI in particular, ignoring Business Interruption risks, and not using knowledgeable brokers who can work with firms as they grow.