HCC International Information and Communication Technology

Transcription

1 HCC International Information and Communication Technology

2 The Growth and Evolution of the ICT Market The Information and Communication Technology (ICT) sector remains one of the fastest growing, most dynamic sectors globally. In this constantly changing market, investment is drawn to quicker, faster, more scalable ways of conducting business to reduce operating costs. The use of the cloud continues to grow and storage of information is expanding at an exponential rate. This rapidly evolving market requires expert underwriters who understand the relationship between changing technology and risk. ICT providers find themselves having to sign more in-depth and descriptive contracts, making it imperative that an ICT insurance policy provides full cover for breach of contract without any exclusions ensuring cover for the client and the broker. As with all insurance products, wordings vary significantly. With the increasing breadth of potential claims and complexities of contracts, it is important to ensure that the policy responds to the needs of the client and provides adequate protection.

3 HCC at a glance HCC Insurance Holdings, Inc. is a leading international Specialty Insurance group with offices in the United States, the United Kingdom, Spain and Ireland. We underwrite over 100 classes of Specialty Insurance products through several lines of business: Accident & Health, Surety & Credit, Directors & Officers and Professional Liability, and U.S. & International Property and Casualty. About HCC The company s diverse portfolio of businesses is largely non-correlated and designed to generate consistent underwriting results, regardless of market cycles. Each of the company s highly entrepreneurial businesses is equipped to underwrite special situations, companies and individuals and acts autonomously to deliver effective solutions. HCC has achieved an outstanding record of growth and profitability since its founding in 1974, through creative but careful underwriting saw HCC celebrate its 40th year, during which time it has evolved into a company with a strong diversified portfolio of businesses and the strength to retain all of its premium. HCC attracts high quality people who seek to build and create expert teams with a reputation for underwriting excellence. HCC maintains some of the highest financial ratings available within the insurance industry AA- Standard & Poor s A+ A. M. Best AA- Fitch HCC Information and Communication Technology 1

4 Professional Indemnity Cover At HCC we are able to consider all risks in the ICT sector, providing cover for all sizes of organisations, from small start-ups to multinationals, from hardware resellers to trading platform providers. Underwriting an IT risk effectively rests on understanding the insured s exposures and what steps the insured has taken to minimise and manage the risk. It is important to look beyond technical jargon and appreciate the insured s approach to running their business, including the contracting process, their dispute and escalation procedures and their relationships with clients. Risk in this market is constantly changing and it is vital to provide up-to-date policies, written by experts, backed by a specialist underwriting team, which understands the ICT market, supported by an expert team capable of guiding clients through claims. Target clients Software companies Hardware companies IT services Telecommunications Communications Equipment providers Digital broadcasters Electronics instruments providers Net earned premium in 2012 $2.2bn USD 2

5 Key aspects of the cover Limits available up to 10,000,000 AOC and AGG Breach of contract no restrictions Liquidated damages Breach of a professional duty Inadvertent transmission of a computer virus Claims emanating from the dishonesty of employees Failure to protect against unauthorised access or use Denial of service attack Defamation Breach of confidentiality and misuse of information Infringement of Intellectual Property Rights (IPR) Loss or damage to documents Negligent acts, errors, omissions, misstatements or misrepresentation Data Protection defence costs Public Relations and crisis management costs Costs of prosecuting infringement of the Insured s IPR Irrecoverable fees Joint ventures Mitigation of loss cover Notification costs following a loss of data Worldwide territory and jurisdiction Any other civil liability Essential cover (in more detail) HCC has protected businesses for over 40 years Breach of contract This majority of technology claims and notifications relate to breach of contract. It is vital to ensure that a policy will respond appropriately and that the cover is not carved out. HCC provide this cover as standard. Unauthorised access, use of and denial of service attacks In the vast majority of projects there is an element of network security. Whether it be failing to configure security correctly or even not restoring security features following system maintenance, technology companies face a potential exposure of opening their clients systems to attack. In addition the growth of hosting software could mean that a denial of service attack on your systems, or infiltration of your systems, results in a claim from a third party against you. HCC s policy will respond to third party claims for this. Public relations and crisis management costs Public perception of a company is one of the biggest concerns for owners and directors of both large and small companies. Following a claim covered under the policy HCC will also provide a fund to mitigate any damage to an insured s reputation. Liquidated damages Changes in the way which companies contract mean that liquidated damages are now a common element on technology contracts. Generally speaking, liquidated damages are excluded in most policy wordings. At HCC we recognise the way contracts are changing and agree to cover liquidated damages as standard as long as they are a fair and reasonable estimate of the damages that have occurred. Infringement of IPR IP has a high value in such a competitive market. Breach of a third party s IP is likely to result in the third party seeking compensation. Our policy provides cover for such a situation up to the full policy limit something that is not always done in other wordings. We also provide a fund for our insured s to prosecute those who infringe their IP. Notification costs following a loss of data With more and more personal data being held and a changing attitude as to how data losses should be handled, HCC have included cover for the costs of notifying those whose data has, or may have been lost. HCC Information and Communication Technology 3

6 Claims Your insurance policy is only as good as its Claims department. HCC Claims offer a first class, streamlined process providing an efficient claims handling service administered by professionals who are expert in the media field and are authorised to make decisions and settle valid claims swiftly. When you have to claim Claims are made for many different reasons, from a complaint from a client who is dissatisfied with your work or the service you provided, to someone who has threatened to withhold payment for your work. In all instances you will need to notify either your broker, or HCC, as soon as possible, paying attention to the terms and conditions of your policy. Our claims handlers, lawyers and other service providers will assist with the claims and any potential litigation process and where possible, we will endeavour to reach an early settlement of any claim made against you. On occasions where it is not desirable or possible to settle a claim, you will be defended as robustly as possible until the outcome is determined by a court, or other competent authority. Our claims experts are in constant communication with our underwriters and operate as a team making it easy to respond quickly and comprehensively to claims. This approach is central to us building long-term relationships with our clients. Claims Examples IT ATTACK The Insured provided IT security and cloud based software services to its client. There were issues affecting iphone and ipad users in the United Kingdom and Europe. It became apparent that there was a security breach and the attacker accessed the Insured s web based administration console. It was alleged that the Insured failed to undertake good industry practice, and certain steps could have been taken to prevent this incident. IT INSTALLATION The Insured installed a phone recording system for its client. Before the contract completed, the Client wrote to the Insured advising that there have been a number of critical failings and it seeks to terminate the contract and demanded compensation. It is suggested that there have been a number of failed attempts to rectify the issues which have resulted in a voice recording system which is still not operational. We worked with the insured to identify the key issues. As a result, they were rectified allowing the contract to be completed and a working relationship retained. IT HUMAN ERROR The Insured s client was a marketing agency running campaigns and competitions for clients. The Client was involved in a competition on a website where a holiday to New York worth 10,000 could be won. The web page had been up and running for a week without problems until a junior web-developer accidently created an error which sent 77 winning messages, when there are only 10 holidays to be won. We assisted our client with legal support in defending their position in accordance with the terms and condition of the contract that they and their client had signed. 4

7 HCC Information and Communication Technology 5

8 Contact us Information and Communication Technology Simon Calderbank Senior Underwriter Information Technology T +44(0) [email protected] HCC online HCC Insurance Holdings, Inc. is an international holding company and a leading Specialty Insurance group since 1974, based in Houston, Texas, with offices across the U.S., Bermuda, England, Ireland and Spain. HCC is rated AA- (Very Strong) by Standard & Poor s and Fitch Ratings and A+ (Superior) by A.M. Best Company. Information detailed within this marketing material is for promotional use only and does not constitute advice or fact. Any reliance upon such information shall be at your sole risk. HCC International Fitzwilliam House, 10 St. Mary Axe, London EC3A 8BF, UK T: +44 (0) E: [email protected] A subsidiary of HCC Insurance Holdings, Inc.