Tech - January 29, 2024
5 Key Insurance Considerations For Technology Businesses
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Technology by its nature is developing and advancing all the time. As insurance specialists in this sector, we love when innovative businesses come to us looking for tailored solutions that can evolve as they do.

We’ve developed a deep understanding of insurers’ approach to technology companies and have found five recent key considerations they’re focusing on when reviewing risks. This is in addition to the usual factors such as the industry you provide technology to, contract sizes, and overseas exposure. Let’s dive right in…


  1. Whether you’re in emerging technology

Over recent years, we’ve seen technology advance at an unprecedented rate. Five years ago it was GDPR. After that it was the rise of blockchain, cryptocurrency and NFTs that kept insurers awake at night. Today’s obsession is artificial intelligence – in fact, ‘AI’ even made Collins Dictionary’s word of the year!

While exciting, these constant iterations change the field of risk insurers face, so it’s natural that they’ll be increasingly wary of this new technology. Any venture looking to harness AI and similar groundbreaking technologies will find insurers asking far more questions, and the solutions offered are likely to be more restrictive.


  1. Whether you’re FCA regulated

Traditional businesses (even those in insurance!) have innovated at a fast pace. We’ve seen a sharp rise in technology businesses venturing into the financial services space, with many having to become regulated by the Financial Conduct Authority (FCA) in their own right.

But regulated professional service firms have strict levels of compliance and guidelines to adhere to. Not only does this create paperwork, delays, and costs to the company itself, but it additionally adds insurance challenges. Being regulated drastically restricts the number of insurers who are willing and able to quote, and the information required to get there is significantly more comprehensive. Premiums themselves can often be multiples of those of similar companies that aren’t required to be FCA regulated.


  1. Whether you offer mission-critical and hosting services

Insurers are increasingly concerned at how reliant businesses are becoming on their technology providers in a growing digital landscape. We’re seeing more questions around:

  • Who are the hosting providers, and what are their redundancy procedures?
  • What level of financial losses would be expected for end clients, and exactly how critical is your technology to that client’s business?
  • How soon would your clients be affected should your technology fail, and what is your expected recovery time?
  • Do you have disaster recovery plans in place, how recently have they been reviewed, and are they regularly tested?
  • What do your contractual terms look like (particularly compared to any outsourced hosting supplier), and how do you cap liability under those agreements?

Insurers want to make sure you’re managing your risk and exposures even if your technology is not vital to third parties. This is to ensure you have strong procedures and contractual terms in place which help build a defence and limit your exposure should a client seek redress for an outage.


  1. The nature of the data you handle

Insurers understand that most businesses will collect data to some degree, but it’s particularly invaluable to those in the technology sector. What’s more, the number of third-party liability claims and instances of data exposure from breaches is rising. They will therefore look to understand some key points in respect of data, including:

  • How much data is your business, and its individuals, handling?
  • What is the geographical spread of data, and do you handle US data in particular?
  • How is the data protected and stored, and what purge policies are in place?
  • What types of data do you handle, from anonymised low-risk records through to special category data?

We’re seeing more and more Professional Indemnity policies restrict cover when it comes to data and cyber liability claims. It’s therefore crucial to understand what you are and aren’t insured for. For most ventures, for example, we’d recommend taking out a standalone Cyber and Data policy alongside your Professional Indemnity, as claims can often overlap between the two sections of cover.


  1. Whether your work involves delivery dates

Insurers are very wary of time-critical projects. Things such as building a bespoke app or developing a game are high-risk projects already – but throw in a time-critical delivery date as well, and insurers get particularly nervous. Complex development projects with essential delivery dates can lead to expensive claims simply due to missed deadlines, even if that’s happened because of things outside of your control.

For these projects, insurers are really drilling down and asking specific questions around how key delivery milestones are managed if you’re developing something for a client or set deadline. They want to make sure you have robust procedures in place to meet these dates and what your protocols are to prevent it from overrunning. Sometimes late delivery is even excluded under Professional Indemnity policies.


How can RiskBox help?

At RiskBox, we’ve been through each of the five above scenarios countless times. Each time we’ve been there to support our clients every step of the way and make sure we find the ideal solution for their business. And we can do the same for you.

There are lots of insurers venturing into the technology space. It’s incredibly important to choose the right one for you and your brand to give you that all-important peace of mind and meet any contractual requirements you may have.


If you’d like to discuss your technology business and how we can help, call us today on 0161 533 0411 or email


Photo by NASA on Unsplash

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