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Technology companies’ success depends on their ability to capitalize on the opportunities presented by innovation, while mastering related business risks. Marsh’s specialists can help you identify and manage your own risks using industry-leading risk assessment tools, data, analytics, and technology.

Risk management is a critical tool in the technology industry, because the stakes are so high. During the COVID-19 pandemic, it became clear how much our world runs on technology. When many people could not leave their homes, technology allowed the globe to keep spinning in some capacity, thanks to work-from-home and digital commerce capabilities as well as platforms for social connection.

Success in the technology industry hinges on an ability to seize opportunities afforded by innovation in a rapidly changing marketplace, while managing associated risks. Data breaches, equipment and software failures, and other cyber risks remain ever-present, despite concerted efforts to reduce the impact of these and other business disruptions.

Marsh’s global Technology Practice can help your company assess its risks, prioritize what’s most critical to you, and work together to help manage and mitigate your exposures.


Technology companies face a number of risks, ranging from cybersecurity and data breaches to industry competition, digital business interruption, IT resilience, and even obsolescence as implementation of artificial intelligence becomes more common. These first two risks, cybersecurity and competition, are perhaps the most pressing for technology companies at the moment. Competition for market share is driving a rapid pace of innovation, and new technologies often go to market before all potential avenues for compromise (such as hacking) are identified and addressed. Unfortunately, this can allow unscrupulous individuals to exploit well-intentioned products and services for their own benefit. Data breaches can have serious consequences for companies and consumers alike, which creates a need for strategic risk management planning.

In addition to the usual insurance for employers, including a business owner’s policy for loss and liability and workers’ compensation where applicable, there are several unique coverages that software companies might consider.

First is cyber liability insurance, which can help pay for recovery efforts following a data breach and associated legal fees. Next is errors and omissions (E&O) insurance, which can be useful in situations involving claims regarding performance of your company’s product.

Finally, another possible consideration is fidelity insurance, which is tailored to industries that rely heavily on intellectual property. Fidelity insurance offers protection for your company, as well as clients, in the event that an employee discloses proprietary information.

Similar to software companies, hardware companies require, at a minimum, the same insurance as most other types of businesses. This includes a general business owners’ policy for loss and liability, as well as workers’ compensation, where applicable, and possibly commercial auto insurance, if product deliveries or services occur as part of routine business operations. Additionally, it can be useful for hardware companies to have coverage for business interruption due to supply chain interruptions and protection against lawsuits related to product failure. These coverage plans have various names, depending on the insurer and area of the world, but essentially serve the same function.

Errors and omissions (E&O) insurance is a type of professional liability insurance that can protect companies against damages from claims or lawsuits alleging that the insured party made a mistake related to its provision of business services or products. Situations that might be covered under an E&O plan include those involving claims of negligence, errors in service, or misrepresentation.

Technology errors and omissions (tech E&O) insurance provides coverage beyond a typical E&O policy for the financial losses a firm’s customers might incur as the result of an error or failure in the technology product or service that the firm has provided. For example, if a company's software fails due to a coding error and it causes the software customer to be unable to transact business, the company's tech E&O policy could cover the losses incurred by the customer.

Technology companies, especially those weighing an IPO, should consider their exposure to risks relating to patents, trademarks, copyrights, and trade secrets.

Depending on specific terms and conditions, intellectual property insurance can provide protection from:

  • Defense costs and damages resulting from IP infringement or misappropriation claims brought by third parties.
  • Defense costs and damages resulting from contractual obligations to indemnify vendors, partners, upstream manufacturers, or downstream customers in the event of third-party infringement claims.
  • The costs of defending against third-party attempts to cancel or invalidate registered IP, patent, trademark, or copyright registrations.