Cyber and Technology Errors and Omissions

Cyber liability insurance protects businesses against the financial and operational consequences of cyberattacks and data breaches. Cyber coverage helps mitigate the impact of network security breaches, privacy breaches, and extortion threats by covering costs such as:

• Data breach response (notification, credit monitoring and PR efforts).
• Forensic investigations and legal defense.
• Ransom payments and business interruption losses.
• Data and asset recovery.
• Digital crime coverage, including funds transfer fraud, invoice manipulation, theft of company funds, and telecommunications fraud.

First-party cyber covers the insured’s losses while third-party liability covers claims against your client resulting from a loss. Third-party cyber typically covers legal fees, settlements and regulatory penalties.

Tech Errors and Omissions insurance protects technology companies against claims resulting from errors in their products and services. It serves as a specialized form of Professional Liability tailored to the tech sector’s unique risks.

Tech E&O covers claims relating to:

• Inadequate service delivery or failure to meet contractual
• System failures or software glitches impacting customers’ operations.
• Negligent advice, misrepresentation, or failure to disclose the limitations of the product or service.

It typically covers legal defense fees, settlements and judgments.

A business is exposed if it delivers software or tech services. Claims could arise from something simple like data being damaged during migration — or the error could be more novel. Consider the risks that come with AI — models making biased decisions, model theft or even data poisoning, where corrupt or misleading data is injected into training datasets, compromising output.

There can be some overlap between the two types of coverage but they’re not the same. Having tech E&O won’t protect your client from cyber exposures and vice versa.

Standard tech E&O isn’t always enough for fintechs. The uncertain regulatory climate and increasing scrutiny calls for cover that’s yet more specialized. Fintech E&O protects against the sector’s unique risks, including the vulnerabilities that come with blockchain.

In Proof-of-Stake networks, validators face slashing penalties for downtime, double signing or other non-compliant actions. The consequences? Staked assets may be lost and claims may follow.

Slashing insurance helps offset the financial loss when protocol rules are enforced, and it covers defense costs. It applies to incidents caused by negligent node operation and not the activities of malicious actors.

Smart contracts enable automated, trustless transactions on blockchain networks. But these contracts are only as secure and robust as the code behind them, and even the best developers can introduce vulnerabilities.

Incorrect contract logic can lead to exploitation as bad actors bypass contract rules. Improper deployment can lead to unauthorized access. Risks can be introduced by integrating with vulnerable oracles. The list goes on. Smart contract failure insurance addresses the legal and financial consequences that arise in these situations.