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Technology Insurance Overview
Enclosed in the table below are some typical coverages that are needed in the Technology industry along with some approximate pricing for your review.
We can usually issue the policy and provide you with the appropriate certificate of insurance for your vendors within “2 hours”.
|Coverage||Limits||Annual Premium (approx)|
|General Liability||$1,000,000||$425 (see detail below)|
(Tech E & O)
|$300,000||$625 (varies by state)|
|Workers Compensation||$150,000 of payroll||$567|
Also, enclosed below is a detailed description of the proposal for General Liability Insurance. The annual premium is $350 (varies by state). You can make monthly payments if you like.
|Liability Coverages||Limits of Insurance||Premium|
|Business Liability Insurance for Each Occurrence||$1,000,000||included|
|Products/Completed Operations Aggregate||$2,000,000||included|
|Personal and Advertising Injury||$1,000,000||included|
|Damages to Premises Rented to You||$300,000||included|
Technology Insurance or tech insurance is a special niche industry and thus requires special niche specific insurance coverage. It is important to you as the tech professional to have a clear understanding of some of the most common insurance coverages that are available for your company. Let us take a look at seven of the most common insurance policies that are available in the technology industry that can provide a broad spectrum of coverages for your unique exposures.
- General liability insurance
This policy forms the basis for your technology insurance portfolio. Most of your clients and vendors will normally require a minimum of $1 million in limits for the standard general liability policy. If you’re annual gross receipts from your fees and services are less than $150,000, then the annual insurance premium for this policy typically is around $425.
- Professional liability and Tech E. & O. insurance
This policy can be endorsed on to your general liability insurance policy to broaden your coverages to provide protection for your professional services exposures. These exposures typically involve claims and losses that arise out of your professional advice, consulting, custom programming and intellectual-property violations. The premium for this policy usually starts at around $1500 per year.
- Umbrella insurance
This policy is normally used to cost effectively increase your limits on your underlying coverages. This is sometimes referred to as excess coverage. The premiums for this policy are usually $450 per million dollars of limits in annual premium. Thus, if you wanted two million dollars more of limits your cost would be approximately $900 per year in annual premium.
- Workers compensation insurance
This policy is normally obtained once you have employees on your payroll versus having no employees or in utilizing independent subcontractors. The premiums for this policy normally start at $567 per year in annual premium. The premiums are based on gross annual payrolls.
- Non-owned/hired auto coverage
This coverage provides your company with protection from automobile claims or losses for liability that arise out of autos that your company does not own or if your company rents autos. If you have employees and/or independent contractors and they are using their personal vehicles on your behalf this will protect you and your company from auto liability claims that they may be involved in. The annual premium for this coverage is typically $175.
- Contents coverage
This coverage provides protection for your equipment, contents, inventory, raw materials, and can be extended to cover property of others. The premium for this coverage is based on the limits that you choose for your contents value. For example, if you had $5000 of contents coverage you might be looking at $200 a year in premium.
- Crime coverage
This is a bond and is not a typical insurance contract. If you have a claim on this policy the insurance company has the right to come after you for restitution. This would be similar to a bank’s right as a mortgage holder on your real property to come after you for a default. The premiums for this coverage are normally around $1775 per million dollars of limits. This policy specifically covers theft and/or employee dishonesty of third parties property.
Technology insurance can be easily designed for your unique niche specific industry exposures. The seven insurance policies that have been described above will typically provide the appropriate protection for 95% of all exposures to loss that you may face.
R. Glenn Matsen, CEO
MBA, CPCU, ChFC, ARM