Every business has unique risks that can seriously harm an organization’s operations if it is not properly protected. As a business using technology to produce and deliver products and/or services, it’s important to recognize and take precautions against risks that your Commercial General Liability coverage doesn’t include.
Technology Professional Liability coverage, also referred to as Tech Errors and Omissions (E&O), is essential for companies using technology because it addresses a lack of protection in Commercial General Liability policies, which typically do not cover claims of third-party financial harm.
Who needs Tech E&O Coverage?
Not only technology industry businesses have technology-related risks. Most companies today use technology in some part of providing a service or product and need to take the necessary precautions. To ensure your company is covering all bases, a full risk management assessment is needed.
What does Tech E&O cover?
Tech E&O manages risks, resulting from providing a product or service to a third party, that are not covered by a Commercial General Liability policy. Specifically, Tech E&O protects your business in the event that a third party suffers a financial loss due to your product or service not performing as it was intended or expected, including the event of an error or omission committed by your company. These policies also cover defence costs in the event of litigation.
Tech E&O coverage would apply in the following situations:
In all of these cases, Commercial General Liability coverage would not cover a claim or any costs of litigation because of the presence of an error and the lack of resulting physical damage to the third party’s property. It should be noted that Tech E&O policies usually exclude product recall, but some will accept damages for loss of use of a failed product. They also generally exclude non-financial losses and intentional or dishonest acts. Contact the Axis Insurance Group today to learn more about protecting yourself with a comprehensive professional liability policy.