A technology company’s business model can include additional layers of exposure on top of the typical risks of everyday operations. To supplement traditional property insurance, general liability insurance, and workers compensation insurance, savvy technology companies will add coverage designed specifically to address the unique risks that arise from working with technologically innovative products and services.
Consider these 14 risks to technology companies and the specialized insurance solutions you can use to help protect your company.
1. Business Loss / System Failure
Software upgrades that cause unexpected system disruptions can result in lost business for your customers and claims for damages if they’re unable to do business. To protect technology companies from financial damages if servers are disrupted, Travelers CyberRisk Tech insurance helps cover loss of business income and helps to mitigate the costs of legal action brought on by customers if operations are interrupted as a result of a covered loss.
2. Cargo on the Road
Those same hardware purveyors who transport valuable equipment are also routinely on the road, delivering products safely and securely to customer locations. Travelers Inland Marine insurance is designed to help protect hardware and other business property that’s transported on land, such as by truck or train. It can work alongside property insurance to provide coverage for high value equipment and other business property that is moved from one location to another. It can also cover someone else’s property that may temporarily be in your possession as well as property you own that’s stored in a different business location.
3. Data Security and Privacy
The negative publicity from a data breach or other cyber attack is compounded by the financial penalties and lawsuits that may accompany a network security lapse. Hackers continuously look for vulnerabilities in electronic business perimeters and a cyber attack can have significant financial and operational consequences.
Travelers CyberRisk Tech coverage is specially designed to help handle the financial fallout triggered by malicious threats, such as ransomware attacks. Travelers can also help improve a computer system after a security breach, when the improvements are recommended, to eliminate vulnerabilities that could lead to a similar breach.
4. Directors and Officers Exposure
Technology companies and their directors and officers can be the target of lawsuits initiated from many different directions. Claims regarding wrongful acts, whether actual or alleged, can be time-consuming and costly to defend.
Directors and Officers Liability insurance (D&O) from Travelers can help cover defense costs and damages (awards and settlements) when claims are asserted.
5. Employee Fraud
With trusted employees, internal and external oversight and robust risk management controls in place, your company should be well-prepared to prevent fraud. But fraud can happen in any organization at any time, including technology organizations. By offering protection against property theft as well as the stealing of funds, Travelers Fidelity and Crime coverage helps protect businesses against the devastating financial loss that can be caused by employee theft and forgery.
6. Employee Injuries
Unfortunately, accidents and injuries in the workplace can be a risk of day-to-day business operations. While these incidents can’t be completely avoided, the length and severity of employee injuries can be reduced, with an eye toward helping employees return to work as soon as medically appropriate. Travelers Workers Compensation insurance helps cover the increasingly high cost of medical treatments for injured employees. MyTravelers® for Injured Employees also allows those individuals to engage with Claim and medical professionals to help navigate the healthcare system.
7. Employment Practices
In a business environment where employee-employer disputes are often taken to court, even the seemingly most airtight human resources policies may contain gaps that could expose organizations to financial loss. Prolonged legal proceedings from these disputes can also pull valuable resources away from the daily operations of the business. To help protect the company from the cost of employee lawsuits that can originate from many directions, Employment Practices Liability insurance from Travelers helps cover defense costs and damages that may result from employment-related claims including workplace harassment or allegations of wrongful termination.
8. Equipment Failures
Commercial property coverage protects against loss or damage to computer servers or computer peripherals caused by a fire. However, such property coverage may not apply if the loss or damage is caused by an electrical failure or mechanical breakdown. Damage to a computer server or peripherals under these circumstances could lead to hours or days without network access, which could result in large revenue losses. Travelers Equipment Breakdown insurance helps protect you against your loss of business income from a total or partial interruption of business if your computer servers or peripherals sustain damage that is caused by an electrical failure or mechanical breakdown. Travelers Risk Control professionals can also inspect existing equipment and recommend strategies to properly operate and maintain hardware on the premises.
9. Global Exposures
Accidents or injuries to employees that occur in foreign jurisdictions may not be subject to the same procedures and resolutions that would apply in the United States. Potential gaps in coverage could adversely affect the assets of the company and the welfare of employees traveling and working abroad. Travelers Global Companion℠Plus+ insurance helps provide comparable coverage that employees would expect and receive while on domestic soil. The program is also tailored to assist executives who may need additional support services while transitioning to a new location.
10. Large Losses
Incidents that lead to claims may be expected throughout the normal course of business operations. However, technology companies might not anticipate high dollar claims that may exceed their insurance policy’s limits of liability. Consequently, damages may need to be paid from general assets or other means.
With Travelers Umbrella and Excess Casualty insurance, tech companies can layer high-liability limits on top of the existing coverage structures of their primary policies. Umbrella and excess coverage can help cover the costs of losses that exceed the limits of underlying polices. This can help protect assets that may be needed for daily operational costs or capital expenditures.
11. Motor Vehicle Accidents
Outside software sales personnel or specialists migrating local systems to cloud-based architecture can spend considerable time on the road, which can increase the chance of motor vehicle claims. Travelers Commercial Auto insurance can help ensure your business is covered for risks posed by your employees traveling in vehicles used for company business purposes. These policies apply to company-owned vehicles and can extend to vehicles that are used for business but may be leased or non-owned.
12. Property Damage
Accidents happen. Employees installing hardware at customer locations may unintentionally damage a customer’s computer assets or other physical property in an office space or warehouse. The costs can be significant if property damage policies are not properly designed to meet the coverage needs of the business.
Travelers Commercial Property insurance allows tech companies to assess their risks and tailor policies according to their unique exposures. It can help protect valuable tech equipment and other physical assets critical for day-to-day operations from damage, loss and theft.
13. Slips, Trips, and Falls
The constant on-site presence of vendors or customers can increase the chances that one of these parties may be injured and that the business may be held liable. Depending on the nature of the injury, medical costs and loss of income claims resulting from slips, trips or falls can mount quickly.
For business premises incidents that may have major financial loss implications, Travelers General Liability insurance is designed to help protect the business from the rising levels of jury awards in addition to defense costs.
14. Third-Party Financial Loss
Software bugs or implementation delays could disrupt customer operations and result in lost sales or opportunity costs. A customer could look to the developer or reseller to recover some or all of the lost revenue from these unexpected mistakes or oversights. Travelers Technology E&O insurance can extend beyond the reach of general liability policies to help minimize the financial impact of errors and omissions. The coverage also applies to independent contractors — at home or abroad— that a global technology company uses to further its business pursuits.
With decades of experience servicing all types of technology concerns, Travelers offers tech companies the industry expertise of our Risk Control and Claim professionals and insurance solutions that can help guide tech companies into a future of innovation.
Contact us today for more information.