You say Silicon Valley and you immediately think that’s where technology comes to life. Start-ups are formed there and launched into behemoth corporations, young entrepreneurs come up with products that simplify our lives and bring everything within reach of our fingertips. All that is great, but tech firms and their executives and employees face a number of exposures in the course of their professional work and operation.
Technology professionals – software designers and developers, app developers, network administrators, IT consultants, system engineers, among others – have a Professional Liability or Errors & Omission exposure. A mistake can be made during the course of their work with a client alleging that the error negatively impacted or harmed his business. Just to defend the claim can run tens of thousands of dollars.
Tech firms are also beholden to their boards of directors, and can find themselves facing directors and officers liability suits, such as financial mismanagement, misappropriation of funds, and negligence. There are also a host of cyber issues, including privacy and network security. If a data breach occurs, the cost to defend and indemnification could be significant. Also involved is the cost of forensic analysis to determine where the breach occurred, the expenses to notify customers, P/R crisis management to mitigate any reputational damage, and more.
Employees can sue a firm for wrongful termination, unlawful hiring practices including discrimination, sexual harassment, etc. The EEOC and DOJ are proactively addressing allegations of employment practices claims.
A technology firm, in addition to having the standard insurance policies – Commercial General Liability, Property Insurance, Business Interruption, Equipment Breakdown, Workers Compensation and others – should be carrying Errors & Omissions Liability, D&O Liability, Cyber Liability, and Employment Practices Liability (EPLI). A professional independent insurance agency can review the specifics for each coverage line.