In today’s economy, almost every sector has become dependent on technology. With this heavy reliance on technology, tech companies are also beginning to feel the liability assumed in providing this now important infrastructure to these industries to have adequate insurance protection and strong risk management strategies. It can be said that the world as we know it would cease working without it.

Since industries have become more digitized, tech firms have trended towards speciality offerings for specific industry sectors. It has also been seen that in order for tech firms to be really successful, they need a niche product offering tailored to an industry’s unique needs.

With this shift of industries relying on technology so much, it’s extremely important that tech firms protect themselves from a legal perspective with strong contractual language, according to Hanadi Diab, senior underwriter – specialty lines, CNA Canada.

Diab told Insurance Business: “Contracts should include a very clear description of the scope of the services they’re offering, as well as a timeline of deliverables, and customer approvals at different stages. Some contractual clauses, such as limitation of liability or consequential damages, can also help to reduce exposure.

A key exposure for tech firms that will require special attention from insurers is cyber exposure. Cyber Intelligence House explains that cyber exposure happens when sensitive information a company has is leaked out to the public.

Diab shares how to be better protected from this type of risk through having cyber insurance and the language of this agreement. “Moving forward, clients should expect more thorough underwriting of cyber risk and stricter management of capacity and limits – and this will be on a case-by-case basis.”

In order for tech firms to be really successful, they need a niche product offering tailored to an industry’s unique needs. By providing these products, and looking out for the risks a technological-based business can bring, having insurance for these occurrences will bring a reassurance to business in need these upgrades.  

Find out how you can insure your business is protected against cyber crime at https://www.otcinsurance.ca/cyber-insurance.