E&O/Cyber protection guide for Technology companies

You chose the technology business – or maybe technology chose you. Your business lives and dies based on

the freedom to innovate at the cutting edge of tech, building it better than your rivals and getting it to market

faster than the competition. You have the vision, passion and tenacity to turn bold ideas into innovative

solutions. Sometimes though – despite your planning, investment and effort – a client claims your work or

work product failed to meet expectations. You may think your Business Owners Policy (BOP) or General

Liability policy protects you from claims or lawsuits seeking damages due to financial loss caused

by an error, omission or negligent act. It won’t – but there are solutions that will help protect you.

Your business thrives on the edge

Perhaps a mistake was made – or maybe not. The costs and consequences remain.

Well-written contracts are challenged and defeated in court every day, and even high-grade products or services may fail to meet client expectations. Every business needs property and general liability protection, but innovative tech businesses like yours need more.

Technology Errors and Omissions (E&O) coverage helps protect your bottom line by providing coverage for defense costs, settlements or judgments when clients claim you made a mistake that cost them money.

And then there’s the data.

E&O coverage is a great start. The next step is to add coverage for a data breach and the loss of identity information. This is a real threat for tech firms. Why? Clients increasingly demand contract terms that explicitly define vendor liability (that means you) for lost or stolen data.

Cyber Liability & Data Breach coverage helps defend against claims or suits alleging you failed to prevent unauthorized access to, or use of, customer information. Coverage applies whether the loss of that data results from a cyber attack or lost laptop; either way, we’ll help cover specified costs. This is important, because payment card fines and penalties, court-awarded judgments and out-of-pocket costs add up quickly, and can include: forensic investigators, customer notification and credit monitoring, lawyers and crisis consultants to help restore your reputation and keep you in business.

Take a look, as we lay out the coverages you may need and how they protect you.

We make it easy to understandThe right coverage depends on one thing – knowing the size and type of risk your technology business faces. Use the following chart to compare coverage benefits and choose the option that’s just right for your business. Our dedicated technology team is here when you need us.

E&O/Cyber Coverage Options for Technology Companies

ELIGIBILITY AND OVERVIEWCyberFirst Essentials® Technology

(Select Accounts)CyberFirst Essentials® Technology Plus

(Select Accounts)CyberFirst® (Global Tech)

Eligible Business Types Technology Products and Services Including IT consultants, ISPs, BPOs, software and mobile app development, telecommunications, website design and hosting, etc.

Technology Products and ServicesIncluding IT consultants, ISPs, BPOs, software and mobile app development, telecommunications, website design and hosting, etc.

Technology Products and Services Including information technology, electronics manufacturing, medical technology and telecommunications

Coverage Limits $500K to $5M ($500K not available in all states)

$1M to $5M $1M to $25M

Deductible options $1,000/$2,500/$5,000/$10,000 (based on policy limits)

$1,000/$2,500/$5,000/$10,000 (based on policy limits)

$10,000(lower options available)

Minimum premium Starting at $600 Starting at $1,400 Starting at $3,500

Application requirements Easily added to a Master PacSM policy (BOP). No separate application or policy.

Easily added to a Master Pac policy (BOP). No separate application or policy.

Available as stand-alone policy or companion to a package policy. Separate application required.

ERRORS AND OMISSION (E&O) COVERAGECyberFirst Essentials Technology

(Select Accounts)CyberFirst Essentials Technology Plus

(Select Accounts)CyberFirst

(Global Tech)Scope of E&O Coverage Covered technology products and services are specifically

defined in the policy – E&O coverage applies to computer or electronic information technology products/services provided by the insured.

Broad enterprise-wide E&O coverage for full scope of work performed by the insured.

Broad enterprise-wide E&O coverage for full scope of work performed by the insured.

Coverage Territory Worldwide – covers wrongful acts, claims or lawsuits originating anywhere in the world – except where prohibited by law or trade sanction

Definition of Wrongful Act Broad definition of wrongful act means any error, omission or negligent act

Breach of Contract Coverage for breach of contract damages

Blanket Additional Insured Automatically included for any individual or organization when required by written contract – no endorsement required

Coverage for Unnamed Subsidiaries Included – At policy inception, insured must own > 50% of unnamed subsidiary

Coverage for Newly Acquired Entities

Up to 90 days1

If total revenue of acquired entity is < 10% of insured’s total revenue, coverage is automatic

Delay in Delivery Exclusion applies No exclusion for delay in delivery No exclusion for delay in delivery

Independent Contractors Not Covered Not Covered Included as an insured for work performed on behalf of insured – no endorsement required

Employed Legal Professionals Not Available Not Available Optional

Communications & Media Liability Not Available Not Available Optional

Coverage not available or pending approval

AK, HI, FL, NY, VT AK, HI, FL, NY, VT NY, HI

1Coverage for newly acquired entities is available for up to 90 days or remainder of policy term, whichever is less.

E&O/Cyber Coverage Options for Technology Companies

CYBER LIABILITY COVERAGE

CyberFirst Essentials Technology (Select Accounts)

CyberFirst Essentials Technology Plus (Select Accounts)

CyberFirst (Global Tech)

Information Security Liability (ISL)2

Limits

Optional – may be added to E&O

Combined limit – shared with E&O

Automatically included with E&O coverage

Combined limit – shared with E&O

Optional

Combined limit – shared with E&O and other liability coverage such as employed legal professional and communications & media liability

Key Coverage Features

Failure to prevent unauthorized access to, or use of, identity information

Included (identity information includes personal identifiers such as name/address/SS#/DOB)

Included (identity information is expanded to include private, confidential or proprietary data)

Included (identity information is expanded to include private, confidential or proprietary data)

Failure to notify customers of a data breach, as required by law

Included Included Included

Failure to provide access to website or communications network to authorized users (i.e. denial of service)

Not Included Included Included

Failure to prevent transmission of a computer virus Not Included Included Included

Failure to comply with any identity information provision in your privacy policy

Not Included Not Included Included

2The CyberFirst policy provided by Global Tech refers to this coverage as Network and Information Security Liability (NAISL).

E&O/Cyber Coverage Options for Technology Companies

DATA BREACH EXPENSE REIMBURSEMENT COVERAGE

CyberFirst Essentials Technology(Select Accounts)

CyberFirst Essentials Technology Plus (Select Accounts)

CyberFirst (Global Tech)

Breach Essentials/ Expense Reimbursement

Limits

Included when optional ISL coverage is selected.

Sublimit applies: $10K/$25K/$50K/$100K/$250K

Included – both ISL and Data Breach Expense Reimbursement coverage are automatically included with CFE Tech Plus E&O.

Sublimit applies: $25K/$50K/$100K/$250K

Optional – customers can select individual expense reimbursement coverage options and sublimits.

Limits start at $250K (higher limits available)

Key Coverage FeaturesCrisis Management Included3 Included Optional – with purchase of any

CyberFirst liability module

Remediation Costs – to identify and correct source of data breach

Included Included Optional – with purchase of NAISL

Customer Notification Expense – required in many states

Included Included Optional – with purchase of NAISL

Business Interruption/ Extra Expense

Included in Master Pac (BOP) Included in Master Pac (BOP) Optional – with purchase of NAISL

Computer Program & Electronic Data Restoration Expense

Included in Master Pac (BOP) Included in Master Pac (BOP) Optional – with purchase of NAISL

Computer Fraud Included in Master Pac (BOP) Included in Master Pac (BOP) Optional – with purchase of NAISL

Telecommunications Theft Not Covered Not Covered Optional – with purchase of NAISL

Extortion Expense Not Covered Not Covered Optional – with purchase of NAISL

VALUABLE BENEFITS FOR TRAVELERS CUSTOMERSTravelers eRisk Hub® Powered by NetDiligence, Travelers’ eRisk Hub web portal helps technology companies prevent and respond to cyber events. Benefits include:

• 30 minute Breach Coach® consultation

• Prevention tools, tips, resources

• Post-event benefits

Risk Control Customer Portal RiskControl.com

Proprietary tools and resources to help business owners manage risk

Available exclusively to Travelers customers

3Crisis management expense reimbursement is automatically included when optional ISL/Data Breach coverage is added to E&O. Crisis management coverage can be purchased separately if optional ISL/Data Breach coverage is NOT added to E&O.

Plain English Please

Crisis Management Expense – Reimburses you for expenses incurred to manage negative publicity and restore confidence following a data breach or claim.

Data Breach Essentials – Provides reimbursement for the direct out-of-pocket costs associated with a data breach event, including 1) notification to customers and credit monitoring services; 2) crisis management or public relations assistance to help mitigate negative publicity and restore your reputation; and 3) consulting/forensic fees to identify the cause of a data breach and whose identity information was compromised.

Enterprise Wide – Technology products or services E&O applies to the business owner’s technology products or services as defined in the policy. When that coverage is broadened to enterprise wide E&O coverage, it expands the scope of coverage to all of the products provided or services performed to or for others by the technology business. In other words, enterprise wide E&O coverage is not specifically limited to computer/technology products and services.

Errors and Omission (E&O) – a form of liability insurance that protects a company or individual against claims made by a client for monetary loss or damages caused by an error, omission or negligent act.

Information Security Liability (ISL) – Covers defense costs, damages and settlements if a customer sues for alleged failure to prevent unauthorized access to, or use of, identity information OR if you fail to notify individuals of an unauthorized access to identify information (as required by security breach notification laws).

Worldwide Coverage Territory – Coverage is extended for wrongful acts, claims or lawsuits originating anywhere in the world – except where prohibited by law or trade sanction.

Wrongful Act – For technology E&O coverage, wrongful act means any error, omission or negligent act.

Sure, technology is a highly-specialized industry, but the insurance language we use doesn’t have to be all tech talk. Here is a glossary of key terms and what they mean for your business.

In case you were wondering…

graph·ene [grafēn] A fullerene consisting of bonded carbon atoms in sheet form one atom thick. Oxford DictionaryGraphene conducts heat 10 times better than copper and electricity, 100 times better than silicon, is transparent like plastic, extremely lightweight, extremely strong, yet flexible and elastic. In the past decade, it has taken the scientific and technology communities by storm, and has become the most promising electronic material to supplement or replace silicon. Wearable electronic devices, aviation components, broadband photodetectors, radiation-resistant coating, sensors and energy storage are among the other active areas of research. As quoted in Fortune, 2014

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