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and technology professional are similar yet very different.
Both types of insurance are relatively new and the terms are
often interchanged creating a significant potential for gaps in
Privacy Insurance covers the key elements of
loss caused by both electronic and non electronic data breaches
liability claim settlement and defense
costs; with options to include
business interruption/extra expense losses and
theft of property.
Technology E&O Insurance covers the insured's
liability to its clients/customers for errors and omissions in
delivering technology products and services and can include the
privacy / security exposure.
of technology products and services
should purchase Privacy Insurance.
of technology products and services need Technology Professional
Privacy Insurance can be purchased either
dove-tailed with the technology product or on a stand alone
basis. A service providers data breach risk can arise from
prevent a breach of client’s data; a third party exposure
typically protected under a technology product.
Breach of their own data would not be
covered under Technology professional and is a first party
coverage. This exposure needs to be protected under a
a client’s data while in the technology providers CCC; through a
network breach; lost laptop, etc. would fall under both
Coverage for liability arising out of design and manufacturing
of technology related products, creation and implementation of
software and related services is big business, and are typically
covered under “standard” type insurance policies (i.e. GL).
Technology E&O can be purchased for a wide
variety of operations including consultants, systems
integrators, application service providers, internet service
providers, internet retailers, cloud services providers, network
electronics manufacturers, medical technology, telecom
companies, etc. The coverages are by no means
standard and vary from situation to situation.
The demands by clients before contracting with a service
provider continues to drive a lot of the requests for these coverages. Clients want proof that their
vendors are properly covered by either a technology product
or privacy & security product.
Many, if not most service providers utilize the use of
independent contractors. It is important to review the
coverages to be sure that the coverage is provided for the work
of the independent contractor while working on the insured’s
behalf. Most IC’s do not carry their own insurance. Also
of utmost importance is the definition of services provided.
Carrier’s handle this in different ways:
definition of the products/services provided – this can be
dangerous if there is a change in the services offered during
the policy period that is not addressed on the declaration page
definition section of the policy defines activities that are
covered; this is usually very broad and encompassing so in my
option is the better option.
With all the variations in coverage needs, coverage forms and
exposures, how are you to be sure you are providing your client
with the correct coverage? That’s why I’m here!