Technology and Digital Business Insurance

The code, the network and the content you hand a client keep working after you leave, and so does the liability attached to them.

Who It Is For

Technology businesses whose work leaves the building.

The type of technology business, its scale and its location all change what the program should include. What these firms share is that clients depend on the work continuing to function after delivery.

Software developers and firms delivering custom builds into a client's operation.
IT contractors and managed service providers holding client networks and data.
Cyber security consultants whose engagement is to prevent the loss they may be blamed for.
Web, media and graphic design studios producing and publishing content.
Any digital business with significant servers, hardware and electronics on its own premises.

Technology business covered by an Oxford Risk commercial program

Industry Overview

In technology the work itself becomes the claim, long after the invoice is paid.

Technology and digital businesses carry the ordinary exposures of any company with a lease, a payroll and equipment on site. What separates them is that the work product goes out into someone else's business and keeps operating there. When it fails, the loss lands on the client first and comes back as a claim against the firm that built it.

That is why this segment sits apart from other professional work. The claims are lawsuits for errors and omissions, liability for viruses and for stolen or compromised data, and outages and downtime that stop work for people who are not your employees. The property side is unusual too: the servers, drives, storage and electronics on your own premises are generally worth far more than the furniture around them.

Major Risks

Where technology claims actually come from.

The exposures that separate a digital business from an ordinary office tenant.

The error you did not catch. A coding issue that costs a client their data, a network built wrong, a missed deadline, a broken link in a delivered site. These are claims about work performance, and they arrive whether or not anyone was hacked.
A client's breach becomes your problem. When a client suffers a data breach they may take the position that the firm they hired was negligent in preventing it. That is a live exposure for anyone who secures, builds or maintains a system.
Your own breach. The same firms that warn clients about hackers hold client credit card numbers, credentials and sensitive records themselves.
Client systems sitting in your hands. Contract work means being inside someone else's network, servers and data. Access of that depth is an exposure in itself, separate from the quality of the work performed.
Equipment failure stops the business. Servers, hard drives and other components are expensive to repair or replace, and while they are down the revenue stops with them.
Content carries its own liability. Anyone producing graphics, logos, images, copy or full sites is producing content whose ownership can be hard to trace, and published work can draw a slander or libel allegation. Creative work is also subjective, so a client can simply decide the delivered product was not what they bought.
Employees with the keys. Staff hold access to client data, networks and funds. Theft of data, money or property by an employee, from your business or from a client's, is a category of loss that liability coverage is not written to answer.

The specific needs of a technology or digital business are as varied as the businesses themselves, and the program usually assembles several of these rather than one policy.

Errors and omissions, also called professional liability. Responds to claims arising from the work itself: an error, an omission, a missed deadline, a product the client says did not perform. It covers defense costs as well as damages, which matters because most of these claims are argued long before anyone concedes a mistake.
Cyber liability, both directions. First-party cyber liability answers a breach of your own systems, including cyber extortion demands, client notification and credit monitoring. Third-party cyber liability answers claims brought by a client whose own breach is blamed on you. A firm that faces clients needs to think about both.
Commercial property and electronic data processing. Property coverage answers fire, theft, water damage and other named perils to the building and its contents. Electronic data processing coverage, sold separately or inside the property policy, addresses computers and hardware, software and data, and electronic media. Carriers define these categories differently, so ask specifically whether loss caused by a virus or a hack is inside or outside the form.
Systems breakdown. Covers the equipment itself when it is damaged and has to be repaired or replaced, and in some cases the business income lost while it is down, usually at a higher premium.
General liability. The premises and operations line: injury to a visitor, damage to a client's property while you are on site, and the content exposures of copyright, slander and libel.
Fidelity bonds for employee dishonesty. Written for theft of data, money or property by an employee, including theft from a client. For firms whose staff hold client credentials, it is a substantive part of the program rather than an afterthought.
Business auto. Contract and consulting work means travel to client sites for setup, monitoring and service. Company business driving belongs on a commercial auto policy, not a personal one.
Workers compensation. Technology work reads as low hazard until someone is working inside a rack or on faulty wiring. Workers compensation answers medical costs and lost income for an employee injured on the job.
Umbrella and excess liability. Sits above the underlying liability limits for the claim that exceeds them.

IT contractors and network consultants

The defining exposure is client systems held in care and custody: a network being built, a server being configured, a database being migrated. A coding issue nobody caught that wipes a client's data is a project errors and omissions claim, and it is the reason E&O is the first line on the schedule rather than the last. On the property side the equipment is the expensive part, which is where systems breakdown coverage sits beside the property policy.

Cyber security contractors and consultants

The unusual exposure is failure to prevent a breach. When a client is compromised, the security firm they retained is an obvious defendant, and third-party cyber liability is written for exactly that lawsuit. Errors and omissions is a separate answer for claims about the work itself, such as an error in your code or a missed intrusion, and fidelity bonds matter more here than almost anywhere because staff hold client credentials and sit inside client networks.

Media, web and graphic design firms

Content is the exposure. Image ownership can be difficult to trace, and work that goes out under a client's name can draw a copyright, slander or libel allegation, which is general liability territory rather than cyber. Creative work is also judged subjectively, so errors and omissions has to answer both genuine negligence, such as a missed production deadline or broken links, and a client who has simply decided the finished product was not what they expected.

A client is suing us. Is that errors and omissions or cyber liability?

It depends on what went wrong. Errors and omissions answers claims that come out of work performance, such as an error in the build, a network configured wrong or a deadline missed. Third-party cyber liability answers the different claim that a client suffered a data breach and holds you responsible for not preventing it. Many technology firms carry both because both suits are available to the same client.

Does cyber liability cover our breach or our client's?

There are two sides to it. First-party cyber liability responds to a breach of your own systems and the expenses that follow, including extortion demands, notifying affected clients and credit monitoring. Third-party cyber liability responds when a client's breach turns into a claim against you.

Is our equipment fully covered by a commercial property policy?

Not necessarily. A property policy responds to named perils such as fire, theft and water damage. Systems breakdown coverage addresses the equipment failing and needing repair or replacement, and electronic data processing coverage addresses computers, data, software and electronic media specifically. Carriers vary in how they define those categories, so the question to ask is whether loss caused by a virus or a hack is included.

Our people work at client sites. What does that change?

Three things. Business auto covers vehicles used for company business rather than personal driving. General liability responds to injury or property damage caused while you are working on someone else's premises. Workers compensation matters because working with wiring, racks and electrical equipment carries real injury potential.

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