Professional Liability insurance is a form of insurance designed to protect professionals and professional organizations from financial loss from their negligence. Professional liability insurance is made up of four major segments: professional liability (also called "errors and omissions", "E&O", or "malpractice"), directors & officers (D&O), employment practices liability (EPL) insurance and the newest segment, Technology (Tech) insurance.
Technology has become ingrained in our personal and professional lives, and the associated exposures are complicated. Exposures can also be severe, impacting both professional developers and users in a variety of ways. Specialty insurers have responded to these exposures with different approaches and policy forms, and these forms have evolved to incorporate both first and third party (liability) coverages. To further complicate the market, there is a long list of names that are used to describe these coverages, including cyber liability, data breach, privacy, hacker coverage, network liability and technology E&O.
At Tennant Risk Services, we begin by distinguishing between technology professionals and technology users. While the needs and forms can be quite different, the technology exposures, Cyber Risks, are similar.
Technology professionals are organizations that bring technology to us. They develop technology and related services for individuals and organizations, and effectively bring this technology to our everyday lives. These organizations need professional liability and other specialty coverages to protect themselves from technology exposures. Professional services include:
Software as a Service/Web Services
Process Control & Robotics
Specialty insurers have created a range of technology E&O products for these professional organizations, and many have added additional cyber risk coverages as well.
Cyber Risk Insurance provides protection to all types of organizations from the inadvertent disclosure and theft of confidential information, such as social security, bank account and credit card numbers, and from damage to or destruction of computer systems and data from computer viruses, hacking and criminal activity. Cyber Risk Insurance is sometimes called Data Breach, Network Security or Privacy insurance.
Obtaining Cyber Risk Insurance is an important mechanism for all organizations in mitigating cyber risks, and the cost is surprisingly low. Because policy forms are not consistent, and enhanced coverage is available from specialty insurance markets, utilizing an expert with access to these markets is critical in ensuring your clients understand the product and get the best protection.
A software consultant recommends the installation of a process control system which includes specialized components developed by the consultant, and the system does not work as expected.
A website developer fails to deliver a client website that does not meet client expectations and after the specified deadline.
IT Consultant was hired to install a specialized data system for use in e-commerce, but consultant stopped development before completion. Customer was forced to bring in a third party to get the system implementation completed, and sued the consultant for costs.
Tennant Risk Services
124 LaSalle Road
West Hartford, CT 06107
Phone: (860) 519-1301
Fax: (860) 216-5845