Question: As a Software as a service company that stores data, do we need E&O insurance? We are a SAAS company. I am wondering if we need to get E&O insurance. The price point of our service is $20/month and we store data such as test & survey results. Wondering if any other insurance besides general liability is recommended for such companies.
Answer: E&O insurance is also known as professional liability insurance and companies providing IT services should always consider E&O insurance for their business. Errors and Omissions insurance will protect your business from litigation caused by charges of professional negligence or failure to perform your professional duties. For a software company, this may include loss of client data, software or system failure, claims of non-performance, or negligent oversell. Professional liability will fill in the many gaps of possible insurance needs that your Scottsdale basic general liability policy will not cover.
Your business will also need to consider other insurance products such as business property, commercial umbrella and most importantly cyber liability. Cyber liability claims have been a hot topic over the last decade and we have seen many incidents with large firms such as; Target, Yahoo, LinkedIn, just to name a few. The losses occuring from the breach of client data has costs these companies millions of dollars over the years. That is why, Smart Move Insurance always recommends cyber liability insurance for any business that collects or stores client information such as date of birth, SSN, credit card information and much more.
I recommend discussing your business insurance needs with a local insurance broker like those at Smart Move Insurance in Scottsdale, Arizona. They have licensed insurance professionals available to discuss your insurance needs and concerns. Additional articles and blogs regarding these topics and much more can be viewed at www.smartmoveinsurance.com