Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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technology business insuranceTechnology business insurance is an important topic that is often misunderstood, particularly by small firms and tech startups.

Research conducted by liability professionals indicates that many business owners who make a living in fields such as Information Technology are simply not aware of the potential pitfalls of their chosen trade.

Tech firms that go about their business without proper insurance stand to lose just about everything they have worked so hard to develop without notice.

Protect yourself and your business by purchasing technology business insurance. Find the best policy available by comparing insurance quotes online. Enter your zip code above to begin comparing rates among all the top insurance companies!

Who Needs Tech Insurance?

Any provider of goods or services is exposed to certain levels of professional liability. Living in a free market society means that clients, customers and consumers can, at any time, make legal claims or complaints against an individual or a business entity.

There are certain expectations within the realm of commerce, and liability is one of them. Business entities and individuals have legal obligations and responsibilities to perform in the course of their operations. When something goes wrong, a legal claim can be entered in court. A claim can result in some very negative outcomes for a company.

Every business owner should carry a comprehensive business insurance policy that addresses the potential risks and liabilities that can arise from the performance of their everyday operations. In this regard, an e-commerce site is no different from a retail store and a software developer faces some of the same liabilities as a furniture designer. IT professionals who provide professional services as consultants are exposed to some of the same risks as tech firms.

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A False Sense of Security

technology insurance

Many technology-oriented businesses and professional that have chosen the World Wide Web as the ideal place to apply their trades mistakenly feel protected behind a monitor and a keyboard. This flawed thinking goes back to the Internet’s early days, when people only logged in occasionally to retrieve information and check their messages.

Now that the Web has become a significant platform for business and commerce, online interactions have become fraught with liability. The Internet is far from being an idyllic Utopia. There are real risks involved when going online. As long as humans are in charge of managing the contents and functions of technology, there will be a potential for mistakes, accidents and malfeasance.

What Could Go Wrong?

Research conducted by insurance companies has demonstrated that tech businesses are often faced with unique risks. The most common claim against a business is likely to face is for non-performance; meaning that a client feels that a business did not perform work as agreed upon in a contract. But there are a myriad loss scenarios which underscore the need for technology business insurance:

  • A tech company misses a deadline on a contract, thus creating a money-losing situation for a client.
  • Custom software applications developed for a client are delivered with a substantial number of errors.
  • Servers that host websites belonging to outside clients crash, inevitably leading to costly downtime.
  • Content published on a website accidentally runs afoul of intellectual property laws.
  • Physical damage from an earthquake, fire, flood, or a hurricane results in loss of expensive hardware and valuable data.
  • Hackers breach a seemingly secure network, steal information or propagate a virus or spyware.
  • A disgruntled employee sues the company for wrongful termination.

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The Low Cost of Insurance

Considering the high level of protection afforded to properly insured businesses, policy premiums are relatively low. A tech business owner or a professional IT consultant can obtain millions of dollars in insurance for just a small fraction of the coverage.

Policy premiums are determined by the desired amount of coverage and the type of business insurance sought. Insurance companies are very competitive, and they offer different levels of coverage and service. When it comes to obtaining insurance for technology-oriented businesses, it really pays to shop around.

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Types of Insurance for the Tech Industry

The dynamic nature of technology has created a wide variety of business opportunities for companies and individuals alike. Some tech enterprises will require different types of insurance, depending on the characteristics of

insurance for tech industry

the business. Factors such as the number of employees and the amount of business conducted on the Internet will determine the type of policy needed.

Some types of policies, such as General Liability Insurance, are pretty standard on their terms and provisions. Other types of specialized insurance cover specific kinds of liability, such as copyright infringement, violence in the workplace, and even acts of terrorism.

To decide on the right type of coverage required, it’s important for company owners and IT professionals to spend time with their insurance agents going over the details of their business operations.

– General Liability Insurance

Sometimes referred to as Business Owner’s Policy, General Liability Insurance protects against sundry types of lawsuits filed for property damage and personal injury. This includes claims for slander and libel.

– Errors and Omissions (E&O) Technology Insurance

E&O policies protect insured parties against claims arising from the actual work performed. For example, a client who isn’t satisfied with a website could sue the designer for failure to perform as stipulated in a contract. E&O policies generally cover legal representation expenses and court costs.

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– Internet Liability

The links often seen at the bottom of just about every website these days -privacy notices, copyright notices, disclaimers, terms of service, and legal notices- serve as grim reminders of just how much liability online businesses are exposed to on a daily basis.

In today’s highly litigious society, every Internet user is a potential plaintiff. Internet Liability Insurance protects against third-party risks such as malware that is accidentally passed on to a website visitor, intellectual property issues and defamation.

The Right Insurance Company

Insurance company representatives and agents who specialize in providing policies to the tech industry should be well-informed about what type of coverage is required. A reputable insurer should be able to quickly provide a free insurance quote online and answer questions about technology coverage.