IT Insurance: A New Need that is Gaining Ground

Much has changed over the last few decades. Quantum leaps have taken place in the development of Science, Technology and Communication. The World Wide Web has firmly made a place in our daily lives and the computer has moved from being a specialized mechanism restricted to laboratories, to being as essential as maybe a toothbrush. It is against such a backdrop that information technology has come to the fore. For the layman the marriage of the computer with communications is what is meant by information technology.  All information systems that depend on computer hardware and   software applications fall within the purview of information technology. The creation of a field of work with a vast number of specialized professionals working in that field creates a concomitant need to protect that body of work and its workers. It is a niche requirement but Insurance firms have identified the need for IT Insurance. In an ever changing scenario of flux, with clients becoming more demanding , user requirements constantly changing and a highly competitive global landscape, insurance companies are in the race to provide the best and most comprehensive and intricate  insurance packages to the IT industry.

Individuals as well as companies are now protected by such IT Insurance packages. Computer consultants, systems integrators, software programmers, website developers are some of the people who can opt for this specialized insurance. They will no longer be at risk for their professional activities. Insurance companies offer several types of coverage under the blanket term of IT insurance. For all companies and businesses offering specialized IT services the professional liability arising from the risks of errors and omissions is often far greater that general liability risks and can leave the company vulnerable to expensive lawsuits. Claims could arise alleging negligence in the provision of technology products and services. Every service right from funds transfer software to data design and everything in between can be insured. Insurance firms have zeroed in on the fact that technology has become an intrinsic part of our lives and for many companies it forms the core of their business and carries the maximum amount of risk. With the exponential rate of change in the world of Information technology, the IT insurance providers too have their hands full keeping up with the complex demands that are constantly changing and yet providing great opportunities to Insurance firms.

Companies have devised IT Insurance policies to give coverage for electronic publishing, web casting and other distribution of electronic content on the Internet. Copyright, domain name, trademark, trade name, title, slogan all of this can be included in the coverage. Sometimes the insured is even given protection against unauthorized access, unauthorized denial or use of service attack on the computer system. Network operations systems link and support workstations, personal computers and terminals. A single lapse could cause huge damage to data, software, business interruption or even cyber extortion. Financial damages could be significant. Thus savvy Insurance firms now offer coverage against Network Operations Systems breakdown. Even the humble notebook can be insured.

It is evident that IT Insurance is a field still in its nascent stages. As new needs are being identified, new protection and buffer strategies are being conceptualized. But what is also equally evident is that from a niche consumer need, IT Insurance is gradually gaining ground to encompass larger ever changing requirements. From being an optional, it is on the way to being an essential.

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About the author

Robert Ellis is a freelance insurance advisor who provides suggestions to clients on various aspects of life and professional insurance cover. He is associated with Bizcover.com.au and provides guidelines on Professional Indemnity Insurance, IT insurance, accounting, business and office insurance and more.

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