In today's fast-paced world, technology has become integral to both personal and professional lives. As businesses embrace technology-driven solutions to enhance efficiency, a crucial question arises: are insurance programmes equipped to effectively cover potential claims when something goes wrong?
Expanding into the realm of technology requires companies to thoroughly review their insurance coverage to ensure it remains comprehensive and appropriate. Ensuring that your business description includes all the necessary elements that encompass the activities you undertake, including any software services and products you provide, is vital. Additionally, consider how these technology services and products are defined within your policy and whether the language used adequately accounts for them. Failing to do so may result in insurers refusing indemnity due to non-disclosure.
The breadth of these definitions, as well as insurers' willingness to cover all potential exposures, can be subject to negotiation. While insurers may seek to exclude coverage for certain aspects of your business, it's essential to address these concerns during the negotiation process. This ensures that your insurance provider can offer the right coverage to safeguard against potential risks, such as products and bodily injury exposures.
With the increased reliance on technology, insurers have been working to clarify coverage in relation to cyber exposures. They have introduced exclusionary or affirmation language into professional indemnity policies to address this. While cyber-related risks might not traditionally fall under professional indemnity insurance (PII), the line between these areas has blurred. Insurance providers utilise various clauses, and it's crucial for each insured party to ensure that the proposed language is "fit for purpose."
Assuming that a cyber policy, if one exists, will cover all relevant exposures can be risky. In fact, professional services elements are often excluded from traditional cyber policies. To safeguard your business, it is essential to review your insurance coverage annually and be fully aware of all services offered throughout your organisation, including overseas operations and any recent acquisitions.
The importance of comprehensive insurance coverage in the technology sector. Let’s explore a scenario involving a global technology service provider, highlighting the value of comprehensive insurance coverage.
The provider encounters a significant challenge when one of its software products malfunctions, leading to substantial financial losses for one of their clients, the affected third party.
This illustration exemplifies the value of comprehensive insurance coverage in the technology sector. By diligently reviewing and updating their insurance programme to address potential risks, the global technology service provider demonstrated their commitment to protecting their clients' interests.
Partnering with a reputable risk advisor supports client-centric protection and outcomes in the ever-evolving world of technology. Be proactive, review your insurance coverage regularly, and safeguard your business's future.
