With the technology industry operating at a staggering pace, firms may be more susceptible to cyber risk. Cyber Liability Insurance can play a crucial role in allowing companies to innovate quickly, through the development of new, cutting-edge products and services to meet consumer demands and stay ahead of the competition, by mitigating the risks that come with doing so. But what is Cyber Liability Insurance? We break it down below.
What is Cyber Liability Insurance?
Effective management of cyber risks for the technology industry requires a comprehensive approach to insurance through a specialised insurance product known as Cyber Liability Insurance, or more specifically, ‘Technology Errors and Omissions’ or ‘Information Technology Liability insurance’.
This modular insurance avoids the issues that can result when attempting to insure these exposures separately as outlined, by combining the various components of professional indemnity (or errors and omissions insurance), public and products liability, and the liability components of cyber insurance. This solution also provides coverage for the incident response expenses and other first party cyber insurance costs, such as extortion, business interruption and asset protection, resulting from a cyber-incident, all subject to a single policy deductible.
Why is Cyber Liability Insurance Important for Tech Firms?
As the technology industry continues to innovate, businesses and individuals have also become increasingly reliant on the solutions that are developed, exposing the sector to greater levels of liability risk from errors and omissions in the design and operations of their products. Additionally, data and cyber risk exposures for technology companies have never been greater, with the threats of data security or privacy breaches, ranking as the risk of highest concern amongst technology companies1.
More so, the biggest cyber risk challenge for the technology industry is that the lines between exposures such as errors and omissions (otherwise known as professional indemnity) and cyber are often blurred. This is due to legal ambiguities surrounding the provision of software products and services, as well as the flow on effect that a data breach or cyber attack will have on a technology firm’s customers. It may not always be clear where such risks would be insured under a traditional program, leading to the potential for underinsurance, over expenditure on premiums, coverage gaps and uninsured losses.
Cyber Risk Liability Insurance provides a robust solution, supporting the technology industry where it needs it most.
What are your cyber risks exposures?
For the technology industry, Cyber Liability Insurance can play a pivotal role in mitigating common cyber risks such as:
- Data Security and Privacy Breaches
- Resilience of IT systems
- Technology Errors and Omissions
- Business Interruption and Contingent Business Interruption
- Breach of Intellectual Property Rights
- Regulatory Compliance
- Multinational Exposures
In fact, the aforementioned technology cyber exposures were identified as the risks of greatest concerns for the technology industry according to a recent Marsh survey1.
How can Marsh help your Technology firm?
Cyber and Technology errors and omissions risks can be effectively managed through a program of continuous improvement and vigilance that combines technology with risk transfer. Additionally, cyber risks are not technical problems that firewalls and patches can solve alone.
At Marsh, we have experience in serving technology companies of all sizes and in all stages of growth, from startups and companies going through initial public offerings, to middle market companies and global leaders and providing comprehensive solutions to address challenges that the industry faces. Our depth of knowledge in this industry allows us to help organisations identify opportunities to enhance their insurance and risk management program, by identifying exposures, coverage gaps, program design options, and driving potential cost savings. That’s why we offer our technology clients, Cyber Liability Insurance, ensuring their adequately covered for the risks their most concerned about.
1. Marsh – 2019 Communications, Media, and Technology Risk Study
