What you Need to Know about Technology E&O

One of the biggest fundamental errors a firm can make is assuming that their programming, systems installation, hardware maintenance or technology consulting is covered by their General Liability policy. When data, especially that containing personal information, becomes involved, firms become exposed to a plethora of new risk exposures. Allegations of copyright infringement, transmission of a virus, or unauthorized access to a client’s system due to technology error, regardless of fault, can result in losses in excess of $100,000. According to Hiscox Ltd., a leading provider of specialized professional liability coverage, 80% of their tech related claims are filled under breach of contract and intellectual property.  A general Professional Errors and Omissions policy offers negligence coverage only. Without Technology or Professional E&O, companies remain exposed to contract and intellectual property lawsuits but also to fraud, negligence and misrepresentation claims.

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Technology Negligence Claim

Plenty of companies can attest to the necessity of Technology Errors and Omissions coverage. One of these organizations in particular provided hardware, software hosting, planning, networking and online data backup through automated software monitoring services. One particular customer, a local plumbing company, was running their business through an old and corrupted server that left the automated software monitoring service they purchases useless.  After six months of the technology company providing a service that, unbeknownst to them, was not working, the server at the plumbing company finally failed. Without the automated system, the plumbing data was unrecoverable. As a result of this inattention by both companies involved, the technology company was brought to court by their plumbing customers for expenses incurred as a result of the failed server. This one incident cost the technology company over $100,000.

Data Breach Claims

Technology companies are not the only ones at risk. According to SC Magazine's data breach archive,  Just in the past month, there have been there have been multiple hospitals that have reported their patient databases as compromised. The San Francisco Department of Public Health has recently released a warmed that more than 50,000 patients’ personal information may be in jeopardy after multiple computers containing client information were stolen. Incidents like this happen all too often.

Why Shop at Apogee?

Our product expertise and dedication to customer satisfaction will ensure that you receive a competitive, personally tailored quote and our close relationships with insurance providers allows us to offer coverage from top markets such as USLI, Beazley, Chubb, Hiscox and many more. For Technology E&O, we accept applications for companies with revenues bellow five million with basic risks and companies with revenues over 5 million with more complex risk coverage. To learn more or talk to an account manager about what we can do for you please visit our website or contact us at 610.337.3200

Applications

http://apogeeinsgroup.com/ProfessionalLiability/Tech-App-Markel.pdf

http://apogeeinsgroup.com/ProfessionalLiability/Tech-App.pdf

http://apogeeinsgroup.com/Technology-Errors-and-Omissions.html

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The Truth About Employment Practices Liability

Did you know 3 out of 5 employers are sued by former employees? From 2001 to 2011, the occurrence of EPL discrimination cases nationwide rose 123%. Private companies are more likely to have an Employment Practices claim rather than a General Liability or property claim.  For reference, a company with $1 million in sales and 50 employees can get an EPLI policy for about $7,000 a year.

One of the most common mistakes small companies make is not making this investment and protecting themselves with Employment Practices Liability Insurance. Over 40% of all employment claims are brought against firms with less than 100 employees. Many Federal and State employment laws apply to employers of all sizes. The median award for EPL claims is over $325,000, this is one risk employers cannot afford to not protect themselves against. 

Apply for EPL Coverage Here
Send Completed Applications Here

 

Despite what many people assume; Employee Practices Liability is NOT covered in other insurance policies such as General Liability. At Apogee Insurance Group, we offer a wide range of EPLI markets and brokers with years of EPL expertise. To understand exactly what kind of protection we can offer, take a look at five of the most common types of EPL claims and examples.

EPLI Claim Examples

Discrimination

Just this month, a Houston manufacturer violated federal law by enforcing a retirement policy they thought to be reasonable. The policy, which required employees to retire at the age of 70, was put under legal scrutiny when an employee was let go on his 70^th birthday. This policy violated the Age Discrimination in Employment Act and employees rights to compete fairly in the workplace regardless of age. Discrimination applies to any protected group of individuals including, and not limited to, disability, race, religion, sex, national origin, pregnancy and even “genetic information.” Gender and age discrimination claims are particularly on the rise.

Wrongful Termination

An employee was recently awarded $3.5 million by a federal jury after he was wrongfully terminated for reporting illegal conduct. When the employee suspected a fellow project manager of fraud; he decided to write a letter to the company's CEO. When the project manager in question heard about the letter, he threatened to lay the employee off. The following week, the whistle-blower was let go and told he was terminated to save money. The corporation had the right idea by encouraging employees to step forward when they suspected dishonest practices. However, one poor decision by a dishonest employee resulted in a crippling lawsuit.

Sexual Harassment

In February of this year, JPMorgan shelled out $1.5 million for a sexual harassment lawsuit. The money was divided among 16 female employees who worked at the bank’s call centers and endured sexually charged behavior and comments from supervisory staff. Sexual harassment education is important in maintaining a safe work environment, but sometimes all it takes is one ill advised comment to bring your company to court.

Wage and Hour Violations

In one of the most high profile EPL cases in the country, the Federal Court settled a $35 million lawsuit against Walmart in July of 2009 on behalf of workers who alleged they were deprived of meal and rest breaks and forced to work off the clock at Walmart stores. This particular case not only was a huge financial loss but also permanently damaged Walmart’s reputation.

Emotional Distress

In 2007, a woman who worked in a bank had an encounter with a bank robber. The robber was armed with a weapon created an extremely traumatic situation for the employee. In the months following the incident, the employee suffered from PTSD including symptoms of anxiety, irritability, sleeplessness and panic attacks. Supervisors at the bank made the situation worse for her by bringing up the incident on a consistent basis and teasing her for her PTSD symptoms. She was eventually compensated for months of emotional distress.

EPL claims can happen to anyone. Don’t let employers go unprotected, fill out an EPLI application today. 

Employment Practices Liability Products 

Employment Practices Liability Application

Documents

What is EPLI

Top 10 List of Reasons Why To Buy EPLI

EPLI Versus BOP Coverage Comparison

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Directors and Officers Liability Coverage: No Longer a Non Profit Luxury

Less than half of America’s 2.3 million nonprofit organizations have the proper liability insurance coverage. With such tight budget restraints and socially desirable goals, many nonprofit board members dismiss director and officers coverage as an unnecessary investment; who would really sue the directors of a nonprofit?

How do we define a nonprofit?
Apply for Nonprofit D&O Here
Send Completed Applications Here 

 In actuality, 63% of nonprofits have reported a D&O claim in the past ten years. Non profit organizations are now more likely than ever to be sued by its employees, members, volunteers and donors. Even if a director or officer has done nothing wrong, it only takes one lawsuit to shut down a nonprofit organization for good.

Beyond this, directors and officers are in serious risk of losing personal assets such as retirement savings, investments and even homes. These board members can be held personally liable for any decisions that are made within an organization. Directors and officers are expected to act with care, loyalty and obedience. It is their duty to act for the benefit of the organization, avoid any conflicts of interest and exercise the utmost skill and care in decision making. Any perceived breach of these duties and members of non profit boards are in serious risk of being sued. Take a look at some of the more common claimants and real life examples played out. 

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Real Life D&O Claims: Most Common Claimants

1. Donor Claim

D&O Duties Clarified

The Board of Directors of church was sued by a number of their donors, alleging misrepresentation of the financial status of the organization. Three members brought separate suits for repayment of the money lent to the church. The first case settled for $240,000 of which $117,000 accounted for expense. The second case settled for $75,000 and incurred $86,000 in defense costs. The last case paid nothing to the claimant, but incurred $13,000 in defense costs. The total loss including defense costs exceeded $530,000. 

2. Third Party Claim

An organization filed a suit against a foundation and its Board of Directors for improperly infringing upon the claimants intellectual property rights. The claimant filed suit seeking injunctive and monetary relief for the Foundation’s alleged improper use of trademarked property while promoting their fundraiser. The claim settled and the total loss including defense was over $400,000.

3. Employee Claim

After 10 years of employment, an employee was fired for poor work performance. This employee brought a discrimination suit against their employer under the Americans with Disabilities Act (ADA). The individual alleged lack of work place accommodation and constructive discharge. The claim was closed for a total loss of over $80,000, including more than $20,000 in defense costs. 85% of all nonprofit D&O claims are employee related.

4. Governmental Agency Claim

 The United States Department of Justice brought suit, alleging misappropriation of funds and failure to revert unused money back to the government. The insured received federal grant money and allegedly used leftover grant money to renovate office space instead of return it to the government. The case closed for a total loss of over $60,000, including $21,000 for defense costs.

5. Volunteer Claim

A volunteer claimed the denial of a full time position was due to her sex, race and pregnant condition. She filed a lawsuit claiming discrimination. The claim is pending further litigation and defense costs paid to date total over $10,000 with an outstanding loss reserve of $65,000.

6. Member Claim

A law enforcement fraternity began proceedings to have a member removed from the organization. This member then sued the organization in order to have the proceedings halted. While there was no monetary settlement, the defense costs were $15,000.

7. Beneficiaries Claim

A discrimination suit was filed against the Board of Directors when the claimant requested a transfer within the housing complex and was denied. The claimant alleged discrimination based on national origin, religion and sex. The claimant was a resident at a drug and alcohol rehabilitation center. The court dismissed the case due to a lack of evidence. More then $10,000 was paid in defense costs.

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D&O insurance is essential in protecting board members beyond what general liability coverage can offer. With the average cost of a Directors and Officers premium under $1,000 with a zero retention and the average D&O claim being well over $100,000, there is no reason not to invest in this essential liability coverage.

Apogee is here to provide specialized coverage for nonprofits around the country. With access to large markets and a team of D&O specialists, Apogee can help insureds acquire the necessary coverage with competitive rates. 

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PRIVATE D&O APPLICATION

Documents

See more reasons all nonprofits should have D&O coverage

Learn more about D&O coverage at Apogee

Nonprofit FAQs

What Defines a Nonprofit?

Who Sues Nonprofits?

Nonprofit D&O Duties and Responsibilities

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