General Liability coverage is part of a Business Owners policy that addresses critical liability exposures of every IT company.
The General Liability policy protects against covered lawsuits alleging “bodily injury”, “property damage”, and “damage to leased premises.”(Note: “personal injury” and “advertising injury” coverages are provided under the Professional Liability (Errors & Omissions) policy.
Potentially covered claims for a tech company include:
- a customer has a slip and fall accident on your premises and sues you for negligence
- you throw a cigarette in a trash can that starts a fire that causes $100,000 of damage to the landlord’s building
- your programming or code that controls a machine malfunctions resulting in bodily injury or property damage to a third party
- you make a disparaging remark about a competitor and you are sued for slander
General Liability Insurance Coverage For Small IT Companies
All tech companies without exception should carry this policy because it is not only needed, but is usually dirt cheap. Typically, a Business Owners policy which includes both General Liability and Property insurance costs $500 for most small tech companies.
The following optional coverages can be added to your policy for an additional premium charge:
- Non Owned / Hired Auto Liability ($225)
- Data Breach (Add 15%).
Non Owned Auto Liability protects your company if it is “shotgunned” into a lawsuit resulting from an auto accident involving a vehicle owned by one of your employees (thus it is non owned by your company) if he or she was using it for company business. Hired Auto Liability protects your company in the event that it is sued resulting from an auto accident arising out of the use of a leased or rental vehicle by one of your employees while on company business.
Hired Car Physical Damage provides your company with a coverage similar to collision & comprehensive, in the event that a vehicle you rent or lease is damaged.
Employee Benefits Errors & Omissions provides protection if you make an administrative error that results in an employee not being able to collect on an employee benefit such as Group Health. Example: new employee is never added to the plan or maternity coverage is not added.
Data Breach provides important protection from emerging risks. IT professionals have an exposure to loss as a result of data breach arising from their own websites, servers, laptops, and paper files. Data breaches can be initiated by online hackers, viruses, malware, disgruntled employees, and ordinary thieves, If confidential or personally identifiable information is stolen, IT firms can be subject to various governmental regulations and civil liabilities, which can be very expensive.
Examples of personally identifiable information include a combination of full name and social security number, bank account number, credit card number, email address, driver’s license number, employment files, and patient medical history.
The following Data Breach coverages ($250,000 sublimit) can be endorsed onto your policy form for an additional premium charge of 15%:
Data Breach Expense
- Develop plan to assist in response to data breach
- Forensic investigation
- Notification expenses
- Public relations expenses
- Credit monitoring expenses
Data Breach Regulatory Action Defense Expense
- Legal defense expenses to defend in regulatory action.
Please note that a Professional Liability policy (and not Data Breach coverage) should cover your liability resulting from client data breaches if it is alleged that your negligence or wrongful act was the cause of the data breach.
Please note that the General Liability coverage does not protect against the types of lawsuits that are covered by a Professional Liability policy (Errors & Omissions). It is absolutely essential that all tech companies carry Professional Liability insurance in addition to General Liability.
Common Contractral Requirements:
- Additional Insureds- No charge as policy includes Blanket Additional Insured endorsement.
- Waiver of Subrogation- No charge. Can be added upon request.
- Primary and Non-Contributory- No charge. Can be added upon request.