Errors & Omissions

What Is Professional Liability Insurance?

And why it’s important

A professional is someone whose vocation or occupation requires special training and skill. Historically, lawyers, accountants, architects, engineers, and medical professionals were the sole occupations that fell into this category as their industries established strict regulation requirements and codes of conduct. In order to practice in these fields, it was necessary to undergo formal training and pass a state licensing exam to be provided with credentials. The first Professional Liability Insurance policies, also known as Errors and Omissions coverage, were devoted exclusively to this elite group.

Gradually, other types of professionals requiring Professional Liability Insurance (Errors and Omissions Insurance) such as real estate agents, business consultants, social services counselors, educators, and computer technology professionals, began to emerge. While these other classes are often referred to as quasi-professionals under the eyes of the law, they have already developed their own industry regulations for education, testing, and accreditation.

Protection for current classes of professionals

Miscellaneous Professional Liability insurance  policies have been developed to address many of the litigation concerns of these new classes of professionals, including computer information technology professionals.

Professional Liability  insurance provides protection against certain types of lawsuits arising out of negligent acts, errors, or omissions committed during business activities and that result primarily in economic damages that are not related to bodily injury, property damage, personal injury, or advertising injury.

Why Professional Liability insurance is important

It is important to understand that a Professional Liability insurance policy is meant to dovetail with a General Liability policy. The General Liability policy covers lawsuits alleging bodily injury, property damage, personal injury, and advertising injury. As a result, these types of injuries are not covered by a Professional Liability insurance policy.

Professional Liability insurance is important because it fills a glaring gap in the General Liability policy, which has a professional services exclusion that takes away coverage for lawsuits resulting from services rendered or failure to render professional services. Professional Liability insurance policies are meant to respond to lawsuits alleging only economic damages where the client has lost money as a result of a negligent act, error, or omission in the performance of the professional services.The definition of Errors and Omissions insurance can vary per policy form.

A good Professional Liability insurance policy is necessary to safeguard the assets of any company that provides professional services.

 

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Categories: Errors & Ommissions, Professional Liability, Reports, Tech Articles and Information, Technology
Insurance Application APproval Tips

Tech Insurance: 6 Tips to Get Your Application Approved

Up to 25 percent of all Professional Liability and General Liability insurance applications are declined by the underwriters.

One reason can be that the technology company engages in a type of work that is an unacceptable risk to the underwriters. More often than not, the tech company shoots itself in the foot during the application process by not understanding the intent behind the questions or not carefully explaining the company’s actual risk characteristics.

Here we offer 6 tips that can boost your chances of getting your Professional Liability  and General Liability insurance application approved the right way without jeopardizing your coverage at the time of a claim.

  1. BE TRUTHFUL: You must truthfully answer all questions on the applications and disclose important information. If you lie or don’t tell the whole truth on your application, you are setting yourself up for a claim denial should you be involved in a lawsuit. Upon notification of a claim, the claims adjuster may review your original application for material misrepresentations. A material misrepresentation is any statement that if  answered correctly would have been reason for the carrier to have denied the application.. A material misrepresentation will likely result in your claim being denied. The end result is that you will forfeit insurance-provided legal defense and any payments for settlement or adverse jury verdict.
  2. PROVIDE A DETAILED DESCRIPTION OF YOUR OPERATIONS: Writing one or two sentence description on the application won’t cut it. because it will appear like you are trying to hide something about your services. This raises underwriter suspicions and will result in either a refusal to consider your application or a string of additional questions that slows down the underwriting process.
  3. Tech Insurance ApplicationREPRESENT YOUR OPERATIONS ACCURATELY: Many insurance carriers that write Professional Liability (or Errors & Omissions) insurance for tech professionals will limit coverage for the types of work that are disclosed on the application. You may think that you are being clever by only checking some of the types of work that you perform, but you’re actually limiting the scope of your own coverage.
  4. DON’T LIST WORK YOU HAVE NO PLANS TO PERFORM: Many applicants shoot themselves in the foot by listing a type of work that they can perform but have no intention of performing. Only list the types of work  you have been performing or know that you will perform within the next 12 months. If you have already signed a contract to perform a particular type of work or are under contract negotiations to perform a particular type of work, it should be disclosed on the application.
  5. DON’T CONTRADICT INFORMATION THAT’S ON YOUR WEBSITE: Many tech professionals list broad categories of work that they can perform on their website to make themselves look more professional to their prospects. Please understand that all insurance company underwriters will do a Google search of your company name and thoroughly review your website. Any contradictory information, such as advertising work you don’t actually perform, will raise a red flag that will either result in rejection of your application or in additional questions that will slow down the underwriting process.
  6. GIVE A DETAILED DESCRIPTION OF ANY HIGH RISK TYPES OF WORK: Offering this information up front may mitigate their impact. Below is a short list of high-risk end uses for your technology products and services that can result in rejection of your Professional Liability or General Liability application, depending upon your level of involvement.
    • Financial transaction software
    • Medical diagnostic hardware/software
    • Manufacturing software (robotics, PLC, CAM)
    • Computer aided design
    • Safety or alarm equipment
    • Utility and natural resource process (oil and gas, power, nuclear, etc.)

If you are involved in any high risk areas, it would be helpful to explain your involvement in detail on your application and to list reasons why your risk would be less than the average risk in such high risk areas. For example, if you subcontract out work in these high risk areas to another tech professional who carries both Professional Liability and General Liability, this should be mentioned.

We’ll be happy to answer any further questions you have, or provide you with a quote. Just call us at 800-622-7370.

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Categories: Reports, Technology

Proactive Data Security

It’s the key to protecting your bottom line

Businesses can no longer afford to treat data security as just another problem for the IT department. It’s now a mission-critical issue for the executive suite. Companies that fail to adequately protect personal information not only run the risk of lawsuits and legal penalties, but also severe and potentially fatal hits to their bottom line.

Top executives and risk managers must recognize that the dangers posed by theft of personal data have escalated sharply in terms of financial liability and the potential for irreparable damage to a company’s reputation.  The loss of confidence in a company’s ability to properly manage confidential information can jeopardize the survival of its business. A well-known credit card processor was dropped by several major credit card brands after a security breach in its system exposed millions of consumer accounts to possible fraud.

Legislative changes

As consumers grow increasingly worried about identity theft and Internet-based fraud, Congress has set stricter standards for protecting personal and corporate data with privacy legislation. Examples are the Gramm-Leach-Bliley, Health Insurance Portability and Accountability (HIPAA) and Sarbanes-Oxley Acts. In addition, the state of California now requires businesses to notify customers when their personal data has been exposed to potential misuse. The costs of notifying tens of thousands of customers can be significant, but inconsequential compared to the potential loss of consumer confidence and goodwill.

Along with new legal standards, companies must confront increasingly sophisticated attacks from computer criminals. The threat has escalated from teenage hackers bent on virtual vandalism to organized criminal gangs seeking to steal sensitive information and hijack corporate systems for their own use. Many are operating out of Eastern Europe and Asia beyond the reach of U.S. authorities.

Steps to take

Modern businesses run on digital data. Securing that data is an essential part of corporate risk management today.To protect themselves, businesses need to take a proactive approach to data security and information management that recognizes the significant financial, legal and reputation risks involved. It is critical that senior executives and risk managers take a leadership role in building privacy and information security into the culture of their organizations. As a first step, businesses need to formally inventory all of the data housed on corporate systems, classify it accordingly to value and sensitivity, and then take adequate measures to secure it. Recognizing that these information security and privacy exposures can also pose a significant threat to the balance sheet, companies need to protect themselves financially by seeking risk transfer options as part of their overall risk management program.

If you have questions or would like assistance determining your insurance needs, please call us at 800-622-7370.

 

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Categories: ACE Articles, Breach Of Security, Cyber Liability

Bing Makes a Name for Itself

 Bing seeks to increase its audience.

When it comes to search engines, Google is the indisputable champ. With a whopping 66.7 percent of all core searches, it would seem that everyone else is just playing for Bing ranks secondsecond. Or are they?

It may surprise you that Bing is currently ranked second, totaling 17.4 percent of core searches.  That number is up from 15.4 percent a year ago. Yahoo, meanwhile, has seen a steady decline in the same period of time.

You may be wondering how Microsoft managed to steal two percent of Yahoo’s audience. The answer is multifaceted. While some of Yahoo’s attrition can be attributed to Bing’s ease of access and quality search results, two of the biggest reasons for the surge are  the integration of Bing into the Windows 8.1 desktop search and its use as the web search tool of choice for the Apple iPhone’s virtual assistant, Siri.

Siri Bings it on

Apple executives weren’t always set on bringing Bing into Siri, nor are they ready to anoint Bing as the next big thing in search engine technology. Google is still the default search engine for the Safari browser. Having been burned by the 2012 Apple Maps fiasco, Apple has been trying a different approach with regard to the easing in of new software and data applications. Siri, in fact, features no branding.  While this is a process that will not drastically alter core search habits overnight, it has created valuable inroads for Microsoft in an environment that does not just pull users away from Yahoo.

Windows 8.1 powered by Bing

A potentially bigger deal for Bing is the integration of the search engine into the Windows 8.1 module. The desktop search tool was previously capable of only presenting the user with local apps and files. Now the results found on your hard drive are combined with all variety of web-based files.  This system was developed so that over time a dynamic ranking can be applied to your search results in accordance to the prior number of clicks.

Learning what’s relevant through clicks and queries is important in strengthening the Bing platform. With the Microsoft and Apple deals increasing its exposure, Bing is poised to climb the search engine rankings.

Source – I Bing, you Bing? Time to take the No. 2 search engine seriously

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Categories: IT News, Tech Articles and Information

Technical Insurance Articles and Information

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Insurance for Techs – An IT Insurance Company for Today’s Times

Insurance for Techs delivers outstanding performance when it comes to information technology insurance. As an IT insurance company, we believe in client service above and beyond your highest expectations, achieved through a consistent commitment to anticipate and fulfill evolving customer needs.

When you get information technology coverage from us, you will work with a team of honest, intelligent, dedicated professionals, who are trained to provide you with a quick and efficient quote at the lowest possible cost.

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Categories: Tech Articles and Information