Technology Insurance — CyberFirst® technology claim scenarios

Coverage Module Real World Claim Scenario CyberFirst Coverage Response
Technology E&O Liability You design a radio unit that is integrated into a wireless local loop telephone system. Contractors install a capacitor backwards into your radio unit as a result of an error in your schematics, causing failures to occur at a certain temperature. Between 12,000 and 14,000 units are installed by the time the problem is discovered. Your client asserts a claim seeking to recover damages resulting from the failures. CyberFirst Technology E&O Liability protection provides coverage for economic loss that is caused by an "errors and omissions wrongful act,"which is broadly defined as "any error, omission or negligent act."
Technology E&O Liability You develop enterprise labor force software to integrate with a client's HR and payroll systems. You fall behind in delivering the work, resulting in missed milestones and nonfunctioning project modules. You contend that the client repeatedly changed the size and scope of the project. Ultimately, the client fires you and files a lawsuit, seeking to recover lost profits due to the disruption. CyberFirst Technology E&O Liability protection provides coverage for economic loss that is caused by an "errors and omissions wrongful act," which is broadly defined as "any error, omission or negligent act."
Network and Information Security Liability Your employee's company laptop is stolen from his home. The laptop contains private financial information of your customers. Your customers sue you for damages resulting from your failure to protect their private financial information. CyberFirst Network and Information Security Liability protection's definition of a "network and information security wrongful act" includes "failure to prevent unauthorized access to, or use of, electronic data containing private or confidential information of others."
Network and Information Security Liability Your employee inadvertently downloads a destructive computer virus that spreads to other files housed on your computer network. Your client downloads information from your website, allowing the virus to spread to the client's computer system and resulting in widespread loss of data and a computer network shutdown. Your client sues you, contending you should have prevented transmission of the virus. The client seeks damages for the lost data and economic loss caused by the network shutdown. CyberFirst Network and Information Security Liability protection's definition of a "network and information security wrongful act" includes "failure to prevent the transmission of a computer virus."
Communications and Media Liability You overhaul your website for the online launch of your new product. Your website now contains a new marketing logo for the new product. After seeing your new website, another company files a trademark infringement suit against you, contending your new logo is similar to its own trademarked material. The lawsuit seeks damages, as well as an injunction to stop you from using the trademark. CyberFirst Communications and Media Liability protection's definition of a "communications and media wrongful act" includes "infringement of copyright, title, slogan, trademark, trade name, trade dress, service mark, or service name in your covered material."
Communications and Media Liability You place advertisements on your website and in your direct mailings to announce a new service offered by one of your important partners. The advertising contains material that your partner's competitor claims it owns. The competitor sues you, contending you are liable for damages caused by unauthorized use of the advertising material. CyberFirst Communications and Media Liability protection's definition of a "communications and media wrongful act" includes "unauthorized use of any advertising material, or any slogan or title, of others in the advertising of the business, premises, products, services, work, or completed work of others."
Expense Reimbursement: Security Breach Notification and Remediation Expenses Coverage A skilled cyber criminal hacks into your company's internal processing system. Names, addresses, and credit card information for over 50,000 of your members are captured out of the system. Expenses will likely include hiring a breach response firm to find the cause of and fix the breach, assisting with notice requirements and expenses, providing credit monitoring and a call center for impacted individuals, and obtaining an ID Fraud policy for affected victims. Coverage for costs incurred by you as a result of a security breach to determine the cause of the security breach and the persons whose identity information was accessed or acquired without their authorization; to develop materials to notify the persons; to provide credit monitoring for 365 days; or to provide a call center to handle inquiries.
Expense Reimbursement: Business Interruption and Additional Expenses Coverage Your organization's server is infected by a severe virus; and as a result, your donation website is not available for an extended period. This coverage will reimburse the net proceeds that would have been earned (or net losses that would have been avoided) resulting from the computer system disruption. Coverage for loss of income, and additional expense incurred to restore operations, as a result of a computer system disruption caused by a virus or other unauthorized computer attack.

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This material does not amend, or otherwise affect, the provisions or coverages of any insurance policy or bond issued by Travelers. It is not a representation that coverage does or does not exist for any particular claim or loss under any such policy or bond. Coverage depends on the facts and circumstances involved in the claim or loss, all applicable policy or bond provisions, and any applicable law. Availability of coverage referenced can depend on underwriting qualifications and state regulations.

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Claim Scenarios

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Even the most conscientious technology companies face claims and lawsuits.