An Internet Company’s Insurance Needs

The protection Professional Liability (Errors and Omissions Liability) insurance provides

Internet companies that provide website design, hosting and other services need Professional Liability insurance, also known as Errors and Omissions Liability,. This coverage protects against the growing number of lawsuits that are arising out of alleged failures of their technology products and services. Internet Liability insurance, which is yet another name for Professional Liability insurance, is a safeguard to protect Internet business owners.

The number of Internet companies providing website design and hosting services has increased exponentially in the past few years, making Internet liability insurance an increasingly important coverage to have. Due to the unique exposures of these Internet companies, a good Professional Liability insurance program should provide specialized coverage for intellectual property violations such as copyright and trademark infringement in addition to computer virus attacks. These risks must be taken into account by website designers and hosting companies when they select their Professional Liability insurance carrier.

Contact us with your questions about Professional Liability (Errors and Omissions Liability) insurance or to receive a quote tailored to your company’s needs.

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Categories: Errors & Ommissions, Professional Liability, Reports

Computer Consultant Insurance Needs

The number of computer consultants in the job market and the need for affordable professional liability (errors and omissions liability) insurance for computer consultants has mushroomed with the technology explosion.

Computer consultants are vulnerable to the types of lawsuits that are covered by Professional Liability (Errors and Omissions Liability) insurance. The failure of their technology services and products to perform can result in lawsuits for negligence and breach of warranty. Professional liability insurance covers computer consultants commonly named in lawsuits alleging that their negligent acts, errors, and omissions have resulted in economic damages to their clients when the technology products and services fail. Computer consultants who bear these risks out of their business or personal assets face unacceptable risks. A good Professional Liability (Errors and Omissions Liability) insurance policy can provide computer consultants with peace of mind.

General Liability Insurance

In addition to Professional Liability insurance, computer consultants should also have a good General Liability Insurance policy to protect their business.

Find out how much Professional Liability (Errors and Omissions Liability) Insurance for information technology companies can cost for you.

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Categories: Errors & Ommissions, General Liability, Professional Liability, Reports, Tech Articles and Information

Deciphering Tech Regulations

Notification Laws, the HITECH Act and Red Flags Rule

New regulations are increasing at a rapid rate making it vital for business owners and managers to become familiar with current regulations and compliance dates.

State notification laws require businesses to notify customers or patients in a timely manner of any data breach that might affect them. Each state has its own requirements and failure to notify per your state’s notification laws could lead to fines and penalties.

The legalese simplified

The HITECH Act, which is part of the 2009 American Recovery and Reinvestment Act, creates a federal notification requirement for the breach of protRegulation stressected health information. The HITECH Act also provides incentives for physicians to put into practice meaningful use of an electronic health record system.
The Red Flags Rule applies to financial institutions and creditors with covered accounts. This rule was created in November 2007 as an addition to the Fair Credit Reporting Act.

The Massachusetts Office of Consumer Affairs & Business Regulation issued a regulation known as Massachusetts 201 CMR 17.00 in September of 2008. This regulation was intended to protect the unauthorized disclosure of personal information for Massachusetts residents. The importance of this wide sweeping law applies to any person or business that holds personal information on a resident of Massachusetts. Penalties for non-compliance may be subject to a finanial civil penalty for each violation of each person affected.

So what’s next? H.R. 2221, the Data Accountability and Trust Act is pending. If passed, it will require businesses to notify customers when outside parties gain access to sensitive information due to a security breach.

How businesses can protect themselves from exposures

Cyber liability or security and privacy insurance has been developed by insurance carriers to provide coverage for these exposures. First-party coverages include business income and extra expense, crisis management expenses, cyber extortion, credit monitoring expenses and notification costs. Third-party coverages include network security and privacy liability, Internet and media liability, and regulatory defense coverage (including penalties and fines).

Finally, remember that there is no standard policy form in the marketplace. Each policy form will require extensive review and analysis by a Cyber Insurance specialist.

Source: David Perkins, September 7, 2009

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Categories: Breach Of Security, Cyber Liability, Identity Theft, Professional Liability, Risk Management

Can I Get My Professional Liability Quote Over The Phone?

Online quote

Yes, but there’s a better way.

A frequently asked question we get is “If I give you my information, why can’t you give me my Professional Liability quote over the phone?”

The answer is simple: We don’t want to waste your time or ours by having to clear up misunderstandings or perhaps missing some information.  Although it seems simple that you can just give us the information over the phone, our online system offers the most thorough process of making sure we have every thing that we need in only a few simple steps. That thoroughness enables us to get you the best quote possible. Many of our carriers will not accept an application that has been filled out by anyone other than the insured.

By using an online application, we are able to save the company and our insureds money in the long run by providing you with the best coverage at the most reasonable rates.

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Categories: Cyber Liability, Errors & Ommissions, Professional Liability

Data Breach Numbers Rise

The latest U.S. Cost of a Data Breach Study indicates a significant increase in not only the out of pocket cost of data breach incidents, but also the cost of lost business created by the turnover of customers due to the breach.

At  $202 per comprised customer, U.S. companies have felt the brunt of data breaches.  Companies that have suffered the most from data breaches are healthcare and financial services type businesses.

In 2008, the average cost for these incidents was $6.65 million.  And the most damaging effect is lost business averaging $4.59 million or $139 per record compromised.

Surprisingly, 49 percent of companies who responded to a current study stated that most breaches actually came from the theft or loss of paper documents, not electronic generated documents.

Source: S. H. Smith & Company, Inc.

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Categories: Breach Of Security, Identity Theft, Professional Liability

Most Common Sources of Tech Lawsuits

IT ProfessionalIT professionals such as computer consultants, web designers, programmers, system integrators, etc. face lawsuit risks from their clients and users of their client’s services. The most common sources of tech lawsuits and corresponding insurance policies are outlined below:

  1. Bodily Injury And Property Damage Liability (General Liability)
  2. Personal Injury And Advertising Injury Liability (General Liability or Errors & Omissions Liability)
  3. Negligent Acts, Errors, Omissions In Performance Of Professional Services Resulting In Economic Damages (Errors & Omissions Liability)
  4. Intellectual Property Infringements such as copyright, trademark, etc. (Media Liability)
  5. Breach Of Security (Unauthorized Access, Computer Virus, Denial Of Service)
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Categories: Errors & Ommissions, General Liability, Professional Liability