SWG PL: IT/Tech – Why Digital Service Providers Need Specialized Insurance

Oct 2020

The need for cyber coverage continues to grow among businesses in the IT sector. According to a report in the CNBC last year, cyberattacks are now costing businesses an average of $200,000. 60 percent of these companies go out of business within six months of a digital incident. (1)

In addition, the report finds small businesses are a favourite target. More than half of all small businesses had suffered a breach in 2019 and four in 10 had experienced multiple incidents. (1)

Senior decision-makers at these companies are unprepared for the growing threat. 66% of small business leaders believe they’re unlikely to be the target of cyber crime, while six in 10 have no digital defence plan in place. (1)

Brokers serving this niche market can add tremendous value to IT and tech firms by providing the education and insurance policy they need to protect their business from cyber threats. Here’s what you need to know.

Who’s Covered Under Professional Liability: IT/Tech Insurance?

The IT/Tech sector comprises small to large sized firms in the following professions:

  • Computer Consultants
  • Computer Programmers
  • Software Developers
  • Database Administrators/Designers
  • Hardware Installation/Support
  • Internet Services Providers
  • IT Consultants
  • IT Project Managers
  • IT Training Consultants
  • Website Designers
  • And more

How Can IT/Tech Companies Protect Themselves?

As cyber threats continually evolve, a company can never be too careful when it comes to securing their business. This is especially true in IT/Tech, where a company’s operations might be completely digital. There is always the risk that something as simple as an email containing personal information sent to the wrong address, or a failure to BCC a list of recipients, could put the entire company at risk of a data breach.

At minimum, IT/Tech companies should have the following procedures and policies put in place to protect themselves:

  • Firewalls to prevent unauthorized access connections from internal networks and computer systems to external networks
  • Anti-virus procedures for desktops and mission critical services
  • Backup and recovery procedures documented for all mission critical services
  • Acceptable use policy and privacy policy for email and internet use

What Other Liability Issues Exist in IT/Technology?

SWG PL for the IT/Technology market covers more than just cyber. It protects IT and tech consultants and service providers from the major liability risks associated with their business.

For example, an IT consultant not only needs cyber protection for their own business. They also risk third-party cyber liability should they recommend to a client insecure software that results in a cyber breach. Tech firms can be held responsible for failing to provide cyber protection.

A company can also be accused of errors or omissions, even when not at fault, by unhappy clients looking to recover profit losses.

Other errors while delivering services can lead to problems such as website downtime, webpage errors, and slower loading times. These issues can contribute to alleged or actual lost profit for the client.

In addition, every professional needs coverage for potential roadblocks to a successful project: missed deadlines, unexpected delays, and any perceived failure to meet industry standards that could result in a lawsuit.

Other sources of legal trouble include:

  • Libel, slanderous and other controversial material that may end up on a company’s website
  • Copyright and trademark infringement from your online services

The Advantage of Tailored PL Insurance

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 product page for more details.

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


  1. https://www.cnbc.com/2019/10/13/cyberattacks-cost-small-companies-200k-putting-many-out-of-business.html