• November 8, 2023

The Basics of Business Tech Insurance: Do You Need it?

The Basics of Business Tech Insurance: Do You Need it?

The Basics of Business Tech Insurance: Do You Need it? 1024 682 Patrick J. Thomas Agency

Business and technology have always gone hand in hand, but there’s never been a time in history where they’ve been more inseparable. Nearly every facet of modern businesses is interwoven with some sort of IT system, which presents inherent risks—especially for small businesses who can’t adequately mitigate those risks. This makes tech insurance a crucial tool for small businesses to mitigate risks, offering a safety net that can be essential for the sustainability and growth of small tech-focused companies. 

What is Tech Business Insurance?

Tech business insurance is a specialized type of commercial insurance that is designed to protect businesses that operate in the technology sector, including software companies, IT companies, and even search firms. This insurance covers a range of risks associated with technology services and products. These can include:  

  • Software development 
  • IT consulting 
  • Data storage  

Traditional business insurance policies may not adequately cover these types of services, so business tech insurance can protect against the unique challenges faced by many tech companies. 

What Does Tech Business Insurance Cover?

Creating a custom commercial insurance plan for a tech company can involve securing a few different types of insurance coverage. These can include: 

  • Professional liability insurance: Also known as errors and omissions (E&O) insurance, this insurance protects against potential negligence claims, covering legal costs and damages if your tech business is sued for professional mistakes or failures. 
  • Cyber liability insurance: a type of commercial insurance that protects businesses from a broad range of cybercrimes and technology-related attacks. This is critical in an era where data breaches are common. 
  • Intellectual property insurance: this protects against costs associated with intellectual property infringement claims. 
  • Product liability insurance: this insurance protects businesses that manufacture or sell tech products, covering potential damage that can be caused by these products. 
  • Business interruption insurance: also known as business income insurance, this commercial insurance protects a business’s income in the event the business has to shut down for a set amount of time due to restoration, including for closures due to a cyberattack. 

Tech business insurance does not generally cover: 

  • Deliberate illegal acts or misconduct by the business or employees  
  • General liability 
  • Property damage 
  • Employee injuries (i.e., workers’ compensation) 

Do You Really Need Tech Business Insurance?

Commercial insurance plans can help protect your business and provide it with: 

  • Risk management: mitigate the risks of owning a small tech business with proper coverage. 
  • Financial protection: you won’t be bankrupted from lawsuits very easily. 
  • Trust: insurance shows a level of professionalism and preparedness; your clients will trust you more. Some clients may also require this type of insurance as a part of them signing with your business. 
  • Peace of mind: you can focus on your business without worrying too much about the inherent risks. 

As with any insurance decision, consulting with a knowledgeable insurance agent or broker who understands the tech industry is advisable to ensure that your business gets the right coverage for its specific needs. 


Looking for business tech insurance? Contact the commercial insurance experts at The Patrick J. Thomas Agency today.