CNA and Your Technology Business

CNA recently presented a Webinar discussing their Technology Business coverages and it was exciting!  Since technology is the present and future of almost all aspects of life, this market will only continue to develop and grow offering an expanding need for commercial coverages to those businesses working in the Technology field.

CNA is setting their coverage apart from the competitors in this market:

  1. Technology companies often provide more than one product or service, so CNA covers multiple products with one professional policy that covers all operations.
  2. Offers General Liability as well as E&O coverage for the Tech Industry
  3. No Exclusion for delay in delivery
  4. No support or maintenance exclusion – Hardware and software have support and maintenance lives. Customers don’t always upgrade to latest versions before support or maintenance stops.
  5. No exclusion for unauthorized access and use
  6. No exclusion for mechanical or electrical failure

How to Find Prospects

Chicago is now becoming known as the next area for new tech startups so try looking for new businesses as well as established businesses.

When searching for prospects on the internet, try using the following key words:

Application Developer

Application Outsourcing

Big Data Analytics

Cloud Provider

Co-location, Hybrid Cloud

Data Center

Data Management Services

Data Mining

Digital Strategy

laaS (infrastructure as a service)

Information/Data Analytics

IT Consulting

IT Hardware

IT Hosting

Managed IT Services

PaaS (Platform as a Service)

SaaS (Software as a Service)

Software Developer/Engineer

Systems Integrator

Technology Component Manufacturer

Web Site Design

What Information is Important When Asking for a Quote?

  1. Company website, as this is the first thing that an underwriter will look at.
  2. Description of operation in detail – what exactly do they do and who is their customer.
  3. Years of professional experience – if the business is less than 5 years old, ask for the total years of experience of owner or principal as CNA will consider this. Experience impacts overall pricing.
  4. IT Security checkbox – Ask if the insured’s primary operations are IT security as this significantly impacts price.
  5. Contract provisions – Does the business use standard contracts for business and what are the provisions – this impacts price.
  6. Quality control provisions – what quality control do they have in place and again, this impacts price.
  7. Gross revenue (Current year expected) – Insured’s gross revenue is the rating basis for Tech E&O and since this is not auditable, it is very important to get right. This also drives application questions and available limit options.
  8. Deductible – what deductible? $5K is the minimum.  Increasing deductibles to $10K are available.  A 10K deductible can impact price by as much as -20%.

Industries that CNA will not consider for coverage:

  1.  IT associated with hospitals and direct patient care (some IT consulting acceptable).
  2. Aviation
  3. Automotive industry when dealing with manufacturing of parts, assembly lines, etc.

Industries that CNA will consider for coverage:

Small Technology Appetite

Software and IT Services (this is 75% of the technology business placed with CNA)

  • Software development
  • Computer programming
  • Data processing
  • Consulting
  • Internet-related services
  • System analysis and design
  • Software consulting and training
  • Informational retrieval
  • Companies that facilitate cloud computing and emerging technology infrastructure
  • IT staffing other than permanent placement

Appetites CNA will consider (end use of product may be needed for consideration)

  • Electronic components including those that outsource manufacturing overseas (fabless)
    • Computer chips
    • Wiring, harnesses, cables
    • Electronic connectors
    • And other component parts
  • Computers and peripheral equipment such as printers, computer storage devices, display devices, document entry, optical scanning and office machines
  • Telecommunications, broadcasting and commercial audio/video equipment
  • Electronic photographic equipment and parts manufacturers

Digital Media – Producers and creators of traditional and electronic content including:

  • Digital advertising firms
  • Creators of digital content
  • Publishers of both traditional and digital newspaper, periodical, book and other content

CNA’s Small Business Competitive Advantages for Technology Customers

CNA Technology E&O

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CNA Technology BOP

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If you have a business that you think would fit with CNA, send Robin Leckner an email with details on their business operation and website to robin@midwestga.com or call Robin at 847-631-6658.

Reminder!!  You can also obtain preliminary quotes for many available appetites with CNA directly from our website:   www.mibsga.com   under the P&C tab.

This might be a great niche to become an expert in as this industry will continue to grow and new businesses will continue to open their doors.  The technology industry will continue to change and morph requiring continual evaluation of coverage to make sure risks are covered appropriately.  These businesses will need agents with expertise in their risks.

If you need promotional brochures, please contact Robin Leckner, at robin@midwestga.com.