Most web hosting providers know that having General Liability is a basic principle of business. If the hosting provider is housed in a larger data hosting facility, they are generally required to have a General Liability policy.
But what some hosting providers may not be aware of is that their primary liability issue may not be covered under General Liability. The primary responsibility of a hosting provider is to ensure that their clients’ web sites are online and accessible at all times. Any outages or issues with accessing the website cause a financial impact.
General Liability provides coverage for bodily injury claims, property damage claims, and personal/advertising injury (such as slander). But what about these more common situations that occur without those things?
- A power outage causes a hosted e-commerce site to be unavailable for hours can a loss of thousands of dollars for the customer.
- A firewall misconfiguration allows a virus to infiltrate the network, compromising personal data in one or more customer web sites.
- An employee reprovisions the wrong web server, accidentally deleting dozens of customers’ web sites permanently.
Since such situations are not uncommon in the web-hosting industry, it’s important to have the right coverage in place to protect your business. A Professional Technology E&O Policy is specifically designed for these types of situations. An E&O Policy covers claims due to mistakes that cause financial loss where there is no physical or property damage as well.
Failing to have both a General Liability policy and a Professional Technology E&O policy is a financial risk that web-hosting providers should not make in today’s business environment. For a fraction of the cost of defending and potentially losing a lawsuit, you can get peace of mind with both types of insurance coverage for as little as $1100, with payment options as low as $110/month.