The types of insurance needed for a tech business can differ from typical brick and mortar style businesses. While you’ll still need the standard property insurance and general liability insurance, you’ll also need additional types of coverage.
Tech companies are flourishing and growing at a rapid rate. Because of this, technology is now replacing existing industries, and competitors may look for loopholes to file lawsuits. Copyright infringement and intellectual property infringement are common issues in the tech industry, and you must be covered with proper insurance to protect yourself.
Here are the primary types of insurance that you should have for your tech business:
1. General Liability Insurance
General liability insurance for small business is one of the most important types of insurance for anyone in tech. Often you are unable to obtain a business permit until you have this coverage. It covers physical injury or damage to your clients, property damage and advertising damage. For a technology company, it’s especially important to have advertising damage coverage, which covers stolen ideas, copyright infringement, slander and invasion of privacy.
It’s third-party insurance and ensures you are protected if someone falls on your premises or if you damage something on a clients’ premises.
2. Errors and Omissions Insurance
E&O insurance is vital for your tech business and will protect you from any claims that your company was negligent in your work. Technology isn’t always perfect, and if your service or product fails in some way, leading to a financial loss for your client, you are liable. Tech is not always covered under product insurance since often it’s a service or digital software. Software generally is not identified as a product under the majority of product insurance provides.
3. Cyber Liability / Data Breach Insurance
Cyber liability insurance will help you protect all your valuable company data. As a tech company, the basis of your business is IT. A data breach or loss of data can have enormous implications for you and your clients. You likely host banks of confidential client information, including credit card details, email addresses, health records and more. Beyond that, your business information is vital to protect, and if this data is stolen, you need coverage.
This insurance will cover any expenses incurred to restore stolen data. It will also protect your business if the victims of the data breach sue you.
4. Fidelity Bond
When you’re working within your client’s IT systems, you have access to a lot of confidential information. And so do your employees. Even if you trust your employees, it’s essential to cover yourself just in case. If your employee steals from a client, whether it’s money or equipment, Fidelity Bond will cover you. If you work with any financial institutions, they will likely require you to have this insurance.
5. Worker’s Compensation Insurance
Worker’s compensation is necessary for your business if you have any employees. If you work as a sole proprietor, you may be able to exclude yourself from the coverage, but it will depend on which state you live in. Worker’s compensation will cover your employees in case of any work-related injuries or illnesses. It will protect you from liability if your employee claims that their illness or injury is the fault of your business.
These are the five main types of insurance you’ll want to have for your tech business to ensure you’re covered. You’ll have protection from common issues that you may face in tech and have peace of mind while running your business.
