LJ’s Top 5 List of What to Watch out For: Second Installment

Here is another list of coverage provisions to watch for and closely evaluate.   These particular provisions all relate to Tech Professional liability policies.

1. Copyright and Trademark infringement coverage should apply to covered services for others; marketing and selling of the insured’s own product and content on the insured’s website.  Watch out for language limiting coverage to products and services for others.    

2. Watch out for policy language covering third party security exposures only when the insured’s procedures meet industry standards.  To fully assess this coverage limitation, you need to know which industry standards and at what point in time.   Failing to meet industry standards sounds suspiciously like negligence (failure to exercise reasonable care given all the circumstances, which circumstances will include industry standards).  If the policy doesn’t cover negligence, what does it cover?

3. Third party security coverage should include protection for tech services that result in a failure to prevent a breach of the systems of others.  This protection is useful when the insured’s services or software are designed to prevent or monitor a breach to the systems of others.  It’s also a good idea for such instances as when the insured’s software, while embedded in the devices of others, fails to prevent a breach in others’ computer systems.

4. Coverage for marketing and selling of insured’s own product and for the insured’s website content should extend to print and electronic communications. Watch out for exclusions indicating the coverage only applies when content is disseminated electronically.

5.  Coverage for independent contractors should be included within the definition of insured.  Watch for coverage provisions limiting coverage only to independent contractors that are scheduled in the application or specifically endorsed.