There are all types of potential liabilities your company may face. Businesses are often surprised to learn that their highest liability expense stems from the very necessary Technology Professional Liability Errors and Omissions insurance coverage.
Many companies don’t think about what would happen if their computers and network were hacked. It is a major pain. That’s where errors and omissions insurance, referenced as E&O insurance, comes into play. E&O insurance protects a professional against monetary damages arising from their negligence – a mistake is made that leads to a financial loss for a client. Here’s how your professional liability is at stake:
In 2010, the average annual cost of cyber attacks for small and medium organizations was $188,2421 and according to a 2016 report (1), cyber-crime costs are accelerating at 27% per year. (2)
The Equifax breach exposed tax IDs, driver’s license details, birthdates, social security numbers and home addresses of millions. Legal fees can climb quickly when a company is sued, regardless if the lawsuit ends in fault for the company or not. Other costs include loss of business income, incident investigation, customer notification, crisis management, fines and/or penalties.
Losing unsecured property
Property loss and the loss of crucial business information are not uncommon. In fact, 42 percent have lost confidential or proprietary information in the past. As a result, 100 percent of companies who have lost data have seen direct losses such as lost revenue or direct financial costs such as money or goods. (1)
Client financial loss
Have you ever dealt with a real or perceived financial loss for a client who placed the blame on your company? A client may allege that you were professionally negligent or failed to perform duties as promised in your contract. A client may file suit and even if you are not held legally responsible, you may have to pay high legal fees that ultimately lead to a financial ruin. Common claims that professional liability insurance covers are negligence such as a mistake in processing electronic data, misrepresentation, violation of good faith and fair dealing, and inaccurate advice.
As your local dedicated agent, Flowers Insurance Agency will ensure that you start with the best coverage and that we proactively look for and communicate any discounts available to you. Call us today at (512) 710-2185 or schedule a no-obligation insurance review.
1. 2010 SMB Information Protection Survey: Symantec.
2. 2016 Cost of Cyber Crime Study: Hewlett Packard and the U.S.-based Ponemon Institute of Cyber Crime.