Data security is a hot topic in the tech industry. So seeing a ‘security exclusion’ on your policy will catch your eye. What is the ‘security exclusion’?   

Let’s say your company is hired to help with the website security for a retail business. After your IT employee fixes an issue, he forgets to restore the firewall, and thet retail business is now exposing a large amount of customer data and transaction information.

PCI  and DSS compliance professionals catch the mistake, and they force the business to notify all customers who may be affected by the exposed data. The business turns to you to reimburse those costs, which could get in the hundreds of thousands. Unfortunately your tech E&O policy has a “security exclusion” – which is common among many carriers – and the claim is not covered.  

Data security is something a lot of people and businesses are sensitive to, and your liability for a breach or information exposure can quickly turn into litigation. If you provide any security services, you need to dive into your E&O policy to make sure you don’t have a ‘Security Exclusion Endorsement’ or any policy language that would take away this coverage.

The legal expert in your office might be able to sift through your E&O coverage forms to make sure you’re in the clear. If doesn’t work, I can help you with a free coverage review.

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