Since 2017, the financial damage caused by data breaches has raised by more than 6 percent. Companies now risk an average loss of $3.86 million for each data breach they encounter. Unfortunately, smaller businesses do not have the resources of larger companies and could face financial ruin if a data breach was discovered. The good news is that there are ways to safeguard your business without breaking the bank. Technology insurance is specifically designed to cover providers of technology products and services. Learn more about how a technology insurance company can help protect your tech startup in the event of a data breach.
What Is Technology Insurance?
Technology insurance is a critical investment option for tech startups looking to protect their business from potential data breaches. If your knowledge-based company owns rights to valuable intangible assets, such as software and intellectual property or sensitive data, you may find that a general liability policy does not provide adequate coverage. While general liability usually protects against bodily injury and property damage, technology insurance protects against the risk of economic loss in relation to intellectual property, cyber property security, and network liability.
What Does Technology Insurance Cover?
Insurance provided by a technology insurance company typically covers any legal defense costs associated with your data breach, even if the allegations are found to be baseless. Insurance technology will also pay for any resulting judgments against your company up to the coverage limits on your policy, including court costs. It is important to read through your insurance policy carefully as coverage can differ from policy to policy. For example, commercial general liability does not typically provide coverage for certain types of liability issues, such as contract performance disputes or programming errors.
Technology insurance can help protect against loss relating to:
Software errors can result in millions of dollars in losses for a company. Remember that errors do not have to be major for them to cost a large amount of money. Minimize your risk of financial ruin with technology insurance.
Technology insurance will typically cover the cost to respond to a breach that has occurred to your company. Policies typically cover the investigation, notification of affected parties, crisis management, PR counseling, credit monitoring, and similar costs.
Today, phishing scams are commonplace. It takes just a single email for phishers to encrypt or steal a business’s data. If one of your client’s is hacked due to this phishing, they may put the blame on you. It is important to not only recognize phishing scams but also know how to protect your company if one should occur. That is where technology insurance comes into play.
Data theft is a growing concern for both small and large organizations and corporations. Approximately 80 percent of these breaches are believed to have a rooted cause of employee negligence.
Technology projects do not always go as planned. If you find that your project must be delayed due to a data breach or similar issue, the right insurance policy may help cover the costs associated with the delay.
Lost data or systems
Due to data breaches or employee negligence, there may come a time when your tech startup experiences the significant loss of data or systems. Whether or not the cause of the lost data was your fault, you could still face the legal and financial consequences of the breach.
How Can Technology Insurance Benefit Start Ups?
As a startup tech company, you are likely looking for ways to protect your assets. Having ample coverage through a reliable technology insurance company can help safeguard your business and provide peace of mind. In the ever-changing technology industry, it is nearly inevitable that a technological product or service will fail or encounter an error at one time or another. When this happens, you want to be protected from the consequences. Technology insurance can provide coverage against serious claims and suits that stem from your products and service. It can also provide the funds necessary to cover various court judgments that may be covered in your policy.
Contact a Technology Insurance Company
As the owner of a startup company in the evolving technology sector, you must be aware of the various problems that can arise at any time. Businesses that tend to ignore the need for technology insurance often end up spending a significant amount of money when data breaches, software failures, and similar problems occur. This not only affects your profits, but also your reputation as a new company in the industry. For more information about technology insurance or how to obtain a technology insurance policy, speak to professional entertainment insurance brokers today.