TUESDAY, JULY 8, 2014
 Are you thinking about starting your own technology company? Do you already own a tech company and don’t know if you’ve got the right coverage? Here’s a quick overview to help along the way:
- General Liability A standard commercial general liability policy is designed to protect your business against bodily injury and property damage claims brought by third parties. This coverage is almost always requested in service contracts, leases, and customer agreements. It is typically inexpensive and easy to obtain.
- Errors & Omissions What happens when you or your employees screw up? E&O, as it’s commonly referred, provides coverage for third party claims arising from the professional advice and services provided by the company. At McFarlin, the number of contracts that we see which require this coverage of their tech vendors is increasing.
- Data Breach Data breach protects you from first and third party losses in the event of a breach to your information system(s). Regardless of whether you store your customers’ information on your servers, or you keep all of your employees’ HR records in a file cabinet, you’re going to be responsible for notification and monitoring costs should a breach occur. This coverage is available on a standalone basis, or it can be paired with the errors & omissions insurance. It’s important to request data breach because typically it is not automatically included.
- Workers Compensation Have employees? Chances are you’re required by your state to provide workers compensation insurance to protect your employees if they get injured on the job. Usually, it doesn’t matter if they’re full or part time.
- Directors and Officers Liability “D&O” provides coverage for losses from claims brought against the directors and officers of a company for “improper acts” performed in their role as director or officer. Claims can – and often are – brought by (inside and outside) investors, employees, competitors, vendors, or customers. The larger the business, the more appropriate this coverage becomes.
- Employment Practices Liability I know we said only 5, but this one’s important. This coverage, sometimes referred to as “hiring and firing” insurance, protects the company and its employees from claims brought by prospective, current, and ex-employees who allege that they were victims of a wrongdoing, e.g., harassment, discrimination, and wrongful termination.
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