Viewing entries tagged
Technology Insurance

Is Your Business Being Held Hostage?

Is Your Business Being Held Hostage?

Picture this... It's Monday morning and your staff are getting settled into a very busy work day. Next thing you know the screens goes blank and you get a pop up message telling you that your server has been locked

Insurance Coverage That Technology Start-Ups Should Consider

Most new businesses start with little to no capital. Technology companies are no exception. Even though new technology companies operate within razor thin margins at times there are important insurance coverages that should be seriously considered to ensure their continuation and future success.

Here are the policies you may want to consider:

Technology Errors & Omissions (Tech E&O) – Insurance for failures in your technology service that could cause customers damages. Tech E&O is quite possibly your most important coverage because most everything you do would be considered a professional service and is excluded from General Liability.

•Data Breach/Privacy Coverage – In case you lose sensitive employee or customer data, this policy pays to notify, monitor credit, and anything else you need to do in case of a breach. We wrote another entry just on this here.

•Media Coverage – If you are doing any kind of software/media/social networking. Some of these coverages are added automatically to the Personal & Advertising injury section of the General Liability policy, but are explicitly excluded for companies with a media focus. Examples of these exposures include libel, slander, unintentional copyright violations, etc.

•International Coverage – If you have operations outside the coverage area (US, US Territories, and Canada)

•General Liability Coverage – This is your most basic insurance that most contracts will require: covers basic trip and fall. You can also add supplementary auto coverage for rented and non-owned (including employee) vehicles. If you have company vehicles, you should consider purchasing a Business Auto Policy.

•Property – Cover your computers, servers, tenant improvements. In addition, business income is added to this policy; look for coverage including business income for Denial Of Service attacks, etc.

•Directors & Officers – Insurance if you have investors or stakeholders. Directors and Officers can be held personally liable for decisions of the company, so this coverage can be crucial in securing high profile board members.

•Disability – Insurance for the owners if they are in an accident and no longer able to work.

•Key Man Life – Insurance policy in case something happens to your partner. Both partners buy life insurance policies on each other, so they can buy out the partner’s share. This way you avoid becoming partners with that person’s significant other.

•Health Insurance – Great way to keep your employees on board and attract great talent.

•Workers’ Compensation – Mandated by California and most state laws even if you just have one part time employee. Good news is that rates for most technology workers are very inexpensive. Computer programming is the lowered filed rate in California. We currently see rates around 20 cents per $100 in payroll. 

•Employee Practices Liability – Protect yourself from employment related lawsuits: wage & hour, wrongful termination, discrimination, harassment, failure to promote, etc.

Some of these policies are offered in packages, while others are sold separately. Most large companies that you will contract with will require you to have General Liability, Technology E&O, Workers’ Compensation, and Business Auto.

Feel free to contact us to see which of these coverages would be a best fit for your business.

Is There A Tech Bubble Happening?

BayRisk Insurance Brokers specializes in technology accounts. We protect software, hardware, internet and technology consultants to name a few. We have seen a recent surge in our clients adding staff, adding space, buying buildings, and an overall growth in revenue. This is great news! We love to see small technology based businesses succeed. However this raises the question of are we looking as the next technology bubble? Here is an article just on the subject...

Tech bubble? Not yet, but don’t get too excited either

There are rumblings around town about a tech bubble like the one that burst following the dot-com boom in the late 1990s. Yet while tech growth in San Francisco has unquestionably fueled the economic recovery here, there is insufficient evidence to make the case for a bubble. Nonetheless, it is not too early to start thinking about what a bust could mean for the economy.

At the annual San Francisco Chamber of Commerce ForecastSF event, Wells Fargo Securities chief economist John Silvia presented data showing that high-paying tech jobs are boosting housing prices. The last time San Francisco saw rents increase like this was during the dot-com boom, and we all remember how that ended.

But there are stark differences between the last boom and this one. For instance, Silvia noted during an interview that a lot of money was thrown at startup companies in the last tech boom, and IPOs were the norm even for businesses that had barely gotten off the ground.

This time around, they are the exception, and even high-profile IPO flops like that of Facebook tend to be connected to real companies with real revenue streams. The majority of the companies raising big money now are ones whose products are already used by large numbers of people.

Mayor Ed Lee, who has positioned tech at the forefront of his economic plans, also believes that talk of a bubble is unwarranted. He said the rush of tech jobs is filling vacancies in office space because of the economic downturn, not building new buildings for companies.

“I don’t think we are really started yet, therefore any predictions of us being in a bubble, to me, don’t even have a premise yet,” Lee said. “We still have a ways to go to fill all of the vacancies.”

Read more at the San Francisco Examiner here...


The Million Dollar Laptop

There are probably laptops out there that are physically worth a million dollars or more. However, I am referring to the laptop with valuable data on it that can be worth millions to a thief. Do you take a laptop with you regularly on business and travel? If you are a business owner, what's your policy on securing sensitive company and client data on yours and staff's equipment? The information on your employee's laptop could be very valuable to identity thieves or someone willing to sell the information to say a competitor.

We are in the middle of the information era. Businesses are relying on computer systems to store, share and process almost every transaction imaginable. Even if you are not in the financial sector and think you are not at risk for data theft or network security, here are some questions to ask:

  • Do we collect client social security addresses, dates of birth, driver's license numbers, home addresses, email addresses, or any other information that could be deemed sensitive?
  • Do our employees have access to sensitive information remotely?
  • Do employees use their smart phones for business? Are we able to do a remote wipe of information should their devices be stolen or disappear?
  • Do we have adequate company policies and procedures in place relating to accessing information?
  • Do we physically or digitally shred documents that possess this sensitive information when we are done with them? 

We are seeing more and more companies requiring our clients to have Network Security and Privacy Insurance. This coverage is designed to cover a data breach after the loss of information and can protect an insured from the loss of information and the clean up involved even if no breach occurs. Did you know it can cost thousands of dollars to notify individuals of a data breach where they could be at risk? In most states you are required to physically mail notification of the data breach to those affected. Some businesses go further and offer credit score reporting to affected parties so they can be sure their credit and or identity were not compromised. Let's say your employee lost a laptop with 5,000 client names and social security numbers (or some other private information). The cost to mail would be in the $3,000 range alone not considering the time involved. If credit reporting was mandatory of offered it could be an additional $125,000! 

Whether you are required to carry Network Security and Privacy Insurance or not, it may be time to consider adding it to your coverage portfolio. Every business seems to have some exposure to data compromise. Your laptop may not look like a million dollars, but you would be surprised of it's true value... Please consult with us if you have any questions on this or other risk that your business faces.