Does Tech E&O Cover Data Loss?

Distinguish between a customer suing because your technology service lost their data and your company paying to restore files. The Hartford gives a failed cloud backup causing a customer’s unrecoverable data loss as an example under its Tech E&O product. The NAIC describes first-party cyber coverage as potentially paying data recovery or replacement costs. Neither description makes an event automatically covered. Check the policy’s definition of data, covered services, damages, restoration expenses, backup conditions, security failure, vendor systems, and exclusions for lost or corrupted electronic data. Confirm whether cyber and Tech E&O coordinate or contain conflicting other-insurance clauses.

Keep client data and your own company data distinct in the application. Ask whether backup failure must result from a covered professional error or a defined security event.

Check whether a client must first make a third-party claim, or if restoration costs are insured directly under first-party cyber coverage.