Today, we posted our update of our report on Technology Errors & Omissions insurance products. This Report covers insurance that is purchased by providers of technology products and services, and includes our comparison of insurance products offered by 30 carriers. The Report is here.
Some of the highlights from the Report:
- Rates are rising; not by a lot (5% or so), but after years of rate decline, this change is important. The increasing premium base coupled with this rate increase means insureds will be seeing meaningful rises in their insurance costs.
- We don’t expect any onerous contraction in the market; it is healthy, and should remain so.
- However, the spate of data breaches, if considered to be the fault of service providers, has the potential to deteriorate loss ratios and, potentially, further drive up rates (and perhaps drive some carriers from the market).
- There is a great deal of disagreement between carriers as to whether response costs for a breach of client data while within control of the insured, is covered if it is not the result of an error or omission. We are concerned about this: we think that service providers would want to – and be expected to – cover a client’s costs of responding to the breach. This response shouldn’t require the breach to be the result of E&O. We predict that carriers will offer more explicit breach response coverage for breaches of client data if they don’t already.
Next issue: Intellectual Property and Media Liability Market Survey 2012 (April)
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