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Have you ever wondered why your business needs technology business insurance? You might need it to protect against claims of negligence or financial loss from a client, for workers’ compensation, against claims of copyright infringement, against data breaches or other security issues, or even damage to commercial property.

A businessperson just has to look at the suit by the state of New York in 2007 against Dell to see that any business dealing with technology—whether a major computer manufacturer or an individual who creates websites for businesses—needs insurance protection.

In the suit, New York Attorney General Andrew Cuomo claimed the company, the number two computer manufacturer in the country, engaged in fraudulent, illegal, and deceptive business practices. He claimed the company promised “award-winning service” seven days a week, 24 hours a day, but created obstacles to those seeking help and technical service for computers.

Here are some of the kinds of business insurance your technology company may need:

Errors and Omissions Insurance (E&O)

This insurance will protect your company against claims that your professional work or negligence caused a financial loss for a client. This coverage is also called E&O insurance.

This is the kind of complaint the state of New York had against Dell, as Cuomo claimed the company used “ultra-restrictive underwriting guidelines” that kept most consumers, even those with excellent credit records, from qualifying for no interest financing, as reported by

E&O insurance covers actual and alleged negligence by a company, independent contractors, or temporary staff; claims arising from previous service; damages and claims; worldwide omissions and errors; copyright infringement; and personal injury.

Professional Liability Insurance

This insurance is similar to E&O, but it also covers cyber liability and protects against claims of software copyright. The coverage is vital for IT/technology consultants, business consultants, and marketing consultants. This is because such businesses are often sued even when there is no legitimate mistake. In addition, failure to perform professional services or incorrect advice often brings a lawsuit.

Network Security Liability Insurance

This covers your company from losses caused by unauthorized access to your data. This might include breaches, denial of service attacks, data theft, unauthorized e-commerce transactions, viruses, and more.

Workers’ Compensation

The law requires most businesses from all industries to have workers’ compensation; it protects you when your employees are injured while working for you. It will also provide protection for costs arising from work-related illnesses. You can learn more about it here.

Commercial Property Insurance

This insurance covers commercial property, including printers, phones, computers, desks and other items. It also protects your business against physical damage from vandalism, fire, theft, and more.

Data Compromise And Identity Theft Coverage

This can protect you if crucial business data is lost or your identity is stolen.

Equipment Breakdown Insurance

This would protect you if a power surge destroyed your computer system. Your property insurance would not protect you because it only protects against “external” problems, such as a fire, while a power surge is often an internal problem.

What Kind Of Businesses Need Technology Business Insurance?

Of course, this list is not comprehensive, but here is an idea of the type of industries that do:

  • Computer manufacturers
  • Computer wholesalers
  • Computer system designers
  • Wireless data networking
  • Modem manufacturers
  • Microchip manufacturers
  • (VoIP) providers
  • Software wholesalers
  • Computer peripheral manufacturers
  • Custom software developers
  • IT consultants
  • Internet service providers
  • Electronic component manufacturers
  • Website developers
  • Pre-packaged software developers
  • Local exchange companies
  • Peripheral wholesalers
  • System integrators
  • Instrument manufacturers
  • Telecommunications resellers
  • Telecommunications equipment manufacturers
  • Measuring equipment manufacturers
  • Switching and routing equipment manufacturers

Some technology businesses purchase a common business policy and add optional coverages and add additional coverage, including technology errors and omissions coverage, cyber liability coverage, identity recovery insurance, crisis response, crime, or equipment breakdown, and other coverages deemed necessary.

There are other types of coverage available that some companies need. If you would like more information about technology business insurance, or anything else, feel free to contact us.