SWG PL: Web Hosting Services 101 - What Brokers Need To Know

January 13, 2021

Web hosting service businesses host websites while providing both Internet access and storage. Typically hired by the webmaster of a company, or by the IT department of a medium to large company, web hosting services need to know the importance of online security to ensure the protection of their customers’ websites and content.

Data breaches are a major problem for web hosting services. Fortunately, security programs and frequent updates exist to create a barrier between web hosting services and online hackers.

With this in mind, web hosting companies need to be insured to the fullest with a customized insurance policy tailored to their unique needs. South Western offers a combination of E&O and CGI, with cybersecurity protection. As specialists in hard-to-place commercial clients, we can create solutions that cover all the necessities for web hosting companies and their customers’ websites.

Common Exposures Range From Technical Errors To Power Outages

Unexpected mishaps and errors are common in the tech world. And in an industry fully reliant on the internet, web hosting services need to take extra precautions to prevent cyber attacks. Following are examples of exposures for web hosting services:

A firewall misconfiguration allows a virus to infiltrate the network, compromising personal data in one or more customer web sites.

An employee reprovisions the wrong web server, accidentally deleting dozens of customers’ web sites permanently.

The customer is unhappy with the reliability of their website’s uploading and downloading speeds, claiming the slower speeds are leading to lost income.

A power outage causes a hosted e-commerce site to be unavailable for hours, incurring a loss of thousands of dollars for the customer.

Most of these situations require E&O coverage to cover some or all of a web hosting company’s legal fees in the event of a lawsuit. But web hosting services will likely need additional coverages.

Does Your Web Hosting Client Have All The Coverage They Need?

Media Liability:

Web hosting services work with their customers’ brand and advertising as part of their work, and so they need to be aware of potential oversights or mistakes that could result in a breach of copyright or trademark. In Ontario, for example, domain names are considered personal property. (1) The web hosting service might be involved in a lawsuit if the customer is involved in a trademark dispute.

Cyber Coverage:

Cyberattacks will always be a key concern for web hosting companies, webmasters, and e-commerce stores, because every website is at risk. Webmasters rely on their hosting services to deliver top notch security with frequent updates. With cyber extensions on a PL policy, web hosting companies can protect themselves from financial loss if they are involved in a breach to their customer’s website.

Fidelity Bonds:

Although a web hosting company might use extreme discernment in the hiring process, employee theft and fraudulence should always be considered when looking for the right insurance coverage. In an industry entrusted with access to the personal data and digital assets of thousands of businesses, this is a risk web hosting service providers can’t afford to overlook - both for their own business and honest employees as well as their reputation. Fidelity bonds protect web hosting companies from financial loss associated with employee theft, whether it be money, physical property, or data.

SWG PL for IT/Tech

SWG PL - IT/Technology Liability insurance is a packaged E&O and CGL policy providing coverage for the multitude of exposures faced by technology companies. Its tailored E&O covers a broad range of IT risks for small to large sized firms operating in various disciplines, including programming, IT consultancy, IT project management, network support services, website design, and more.

Coverage highlights:

Distinct insuring agreements provide affirmative third-party coverage for:

Professional and Technology Services Liability

Media and Advertising Liability – includes coverage for infringement or dilution of trademark, title, slogan, trade name, trade dress, service mark, service name, copyright, plagiarism, and misappropriation of ideas or information

Technology Products Liability – includes loss of use of technology products

Network Security and Privacy Liability – includes coverage for the failure in security that results in unauthorized access, use, tampering, denial of service or introduction of malicious code into data or systems, including disclosure of personal identifiable information

Optional Cyber extension (first party coverage)

Limits available up to $5mm

Defense costs in addition

Claims made policy form; Insurer has the “duty to defend”

Coverage on a worldwide geographical basis

Visit our website for more details.

Content is current as of the date of broadcast and is subject to change without notice.


Sources:

  1. https://www.mcmillan.ca/whats-in-a-name---the-Supreme-Court-of-Canada-confirms-that-domain-names-are-personal-property