Technology platforms and operational services for clients are embedded in almost all businesses, and the issues that can develop are quite well known, from cyberattacks to service outages and everything in between.
When most people think about technology insurance, they think of cybersecurity insurance that protects their software and technology infrastructure from ransomware attacks and other external threats. What is often overlooked is the need for Technology Errors & Omissions (E&O) Coverage, and how it is entirely separate coverage than Cybersecurity insurance.
A quality technology E&O policy covers IT services and platforms that are offered to a client through the insured company’s technology infrastructure. Any software product or platform accessed by a client or operational process a company hosts within their own technological infrastructure for a client needs to be covered with a technology E&O policy. This policy protects the company from the financial fallout of errors that could impede a company’s revenue generation because of errors that could arise during software implementations, maintenance and updates or even bad code written for a client or on a website accessed by a client’s customers.
Where cybersecurity insurance focuses on external threats and attacks, quality technology E&O policies cover internal mistakes and errors that occur, causing clients to lose either information, revenue or both.
“Technology E&O coverage gets overlooked by both executives and technology managers, but it is really needed any time you are delivering software products and services to a client, or have a client accessing your technology infrastructure, from portals to platforms and anything in between,” said Laura Hemenway, an IT executive consultant based in Scottsdale, Ariz. “Be thorough when selecting a plan because those with lower coverage limits can become rendered useless quick if something major happens.”
Hemenway has observed first-hand the dramatic increase of cybersecurity insurance over the past decade, and strongly believes even more stakeholders need to be at the table when making the decision for technology E&O policies because of the limited amount of policies available in comparison.
Technology errors in service that cause negative effects on your client’s product availability, digital platforms, communications and marketing campaigns or supply chain all could possibly initiate a claim from an E&O policy. Be wary of policies with low coverage levels, and make sure to compare at least three different plans to get a gauge on the variety of policy options.
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