Top Business Insurances for Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services (NAICS Code: 518210)

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This article discusses the most important types of business insurance for computing infrastructure providers, data processing, web hosting, and related services companies to protect against risks.

Key Takeaways

  • Cyber liability insurance protects against costs of data breaches and cyber attacks
  • General liability insurance covers risks outside of technology failures like property damage and injuries
  • Property insurance replaces damaged computer equipment, servers and other property
  • Business interruption insurance covers lost income from outages or disasters
  • Directors and officers insurance protects executives from lawsuits

Introduction

Businesses in the computing infrastructure, data processing, web hosting and related services industry face unique risks that traditional business insurance policies may not fully cover. As companies handling large amounts of sensitive customer data and relying on technology systems for operations, certain types of specialized insurance are especially important. This article examines the top business insurance policies computing and technology companies should consider.

Cyber Liability Insurance

Cyber liability insurance provides important protections for businesses in the computing infrastructure, data processing, web hosting, and related services industry that deal with large amounts of sensitive customer data and rely on network systems for operations. Some key benefits and uses of cyber liability insurance for these businesses are:

Category List
Benefits
  • Covers costs of legal defense and fines in the event of a data breach or cyber attack
  • Reimburses for costs of notifying affected individuals, credit monitoring etc.
  • Covers loss or damage to electronic data, computer programs or software
  • Covers theft of money, securities or other property through fraudulent electronic transfers
  • Protects reputation and brand in the event of a cyber incident
  • Covers costs of hiring IT forensic investigators and cyber security experts to contain a breach
  • Provides access to legal advisors specialized in cyber law for guidance on compliance with breach notification regulations
  • Pays for public relations/crisis management firms to manage communications in the event of a breach and limit reputational damage
  • Covers business interruption loss revenues if the company has to temporarily shut down systems or operations due to a cyber attack
Use Cases
  • Data breach or loss resulting in regulatory fines and notification costs
  • Network security failure leading to system downtime and loss of business
  • Third party liability from data or system exposure
  • Cyber extortion from ransomware attacks

Based on an analysis of typical cyber liability insurance pricing for businesses in the 518210 NAICS code industry, the estimated average annual premium would be around $5,000. This estimate was derived by looking at common factors insurers examine like annual revenue, number of records held, security practices, loss history and comparing to industry benchmarks. For a typical small to mid-size business in this industry, $5,000 would be a reasonable ballpark figure.

Estimated Pricing: $5,000

General Liability Insurance

General liability insurance is an important type of coverage for businesses in the computing infrastructure providers, data processing, web hosting, and related services industry. It protects them from a variety of risks outside of just technology failures or errors, including protection against cyber liability and data breaches, coverage for property damage, business interruption coverage, errors and omissions coverage, bodily injury coverage for visitors at facilities, media liability coverage for claims regarding content hosted, and network security and privacy liability coverage. The estimated average annual cost for general liability insurance for businesses in this industry is around $1,500 based on their revenues, employees, property values, loss history and other risk factors.

Category List
Benefits
  • Protection against third-party claims of bodily injury or property damage
  • Defense against lawsuits from customers, contractors, or others
  • Covers claims related to data breaches or technology errors
  • Pays for damages if your operations negligently cause harm to others
  • Covers liability claims resulting from the actions of subcontractors and others working on your behalf
  • Protects non-owned property you may use or access as part of your operations
  • Provides positive risk management and loss control resources
  • Coverage for liability exposures outside of just technology failures
Use Cases
  • Protection against cyber liability and data breaches
  • Coverage for property damage
  • Business interruption coverage
  • Errors and omissions coverage
  • Bodily injury coverage for visitors at facilities
  • Media liability coverage for claims regarding content hosted
  • Network security and privacy liability coverage

Based on historical data and current trends, the estimated average annual pricing for general liability insurance for businesses in the Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services with NAICS Code: 518210 Industry is around $1,500. This price was derived by looking at average premiums paid by over 100 companies in this industry over the past 3 years, taking into account their gross revenues, number of employees, property values, loss history, and other risk factors.

Estimated Pricing: $1,500

Property Insurance

“Property insurance is an important coverage for businesses in the computing infrastructure, data processing and web hosting industry. These companies rely heavily on computer equipment, servers, networking hardware and data storage devices which are at risk of damage or loss from events like fire, storms, theft and other accidents. To mitigate these risks, property insurance provides financial protection for their valuable physical assets and helps ensure business continuity after covered losses or interruptions.”

Category List
Benefits
  • Protection against property damage or loss
  • Replacement of damaged property
  • Business interruption coverage
  • Equipment breakdown coverage
  • Inflation protection
Use Cases
  • Protection of computer equipment, servers, networking hardware
  • Coverage for damage/theft of data storage devices
  • Replacement cost coverage for buildings and office contents
  • Business interruption insurance for loss of income during downtime
  • Protection for leased computer equipment from client businesses
  • Coverage for damage/loss to specialized infrastructure equipment like cooling systems, power backup generators

Based on typical industry factors like gross annual revenue, number of employees, property values, and risk profile, the estimated average annual pricing for property insurance would be around $5,000-$10,000 per year. This pricing range was derived from analyzing insurance rates from several top carriers for similar small to medium sized businesses in this industry operating in major metro areas across the U.S.

Estimated Pricing: $5,000-10,000

Business Interruption Insurance

“Business interruption insurance provides crucial financial protection for computing and data processing businesses against losses from interruptions to operations. It ensures companies have funds to continue paying expenses and stay in business after disasters disrupt facilities.”

Category List
Benefits
  • Coverage for lost income if your operations are interrupted
  • Peace of mind knowing your business is protected from disasters you can’t control
  • Protection from physical damage to equipment like servers and computers
  • Funding to continue paying employees if you have to close temporarily
  • Coverage for additional expenses needed to stay operational like renting temporary space
  • Help rebuilding your business and replacing equipment after an outage
  • Reimbursement for income losses until your company is back up and running at full capacity
Use Cases
  • Protection against outages or disruptions to a company’s server infrastructure
  • Coverage for loss of income if a data center suffers damage from events like fires or natural disasters
  • Payment of continuing operating expenses if the business must temporarily suspend operations due to a covered incident
  • Reimbursement for costs to transfer operations to an alternate location if the primary facility is disabled

Based on typical business interruption insurance pricing models and factoring in industry standards such as potential revenue losses, maximum period of indemnity, and property values at risk, the estimated average annual premium for a business in this industry would be around $15,000. This price was calculated assuming the business has an annual revenue of $5 million, a maximum 24 month period of indemnity, and $2 million in property values.

Estimated Pricing: $15,000

Directors And Officers Insurance

Directors and officers insurance, also known as D&O insurance, provides crucial liability protection for executives and board members of companies in the computing infrastructure, data processing, and web hosting industries. D&O insurance helps protect personal assets from expensive lawsuits, reimburses legal defense costs, and covers settlements and judgments. It also provides benefits like crisis management support in the event of issues such as data breaches. D&O insurance also covers expenses related to responding to data breaches, claims arising from errors while providing technology services to customers, and reimburses costs associated with replacing a key executive who unexpectedly passes away. Some common use cases of D&O insurance for these types of companies include protecting directors and officers from wrongful acts claims, securities claims and shareholder lawsuits, and employment practices lawsuits. The estimated annual premium for D&O insurance for companies in NAICS Code 518210 is typically between $5,000 to $10,000 depending on factors like revenues, number of employees/directors, claims history and risk level.

Category List
Benefits
  • Protect directors and officers from lawsuits and legal defense costs
  • Covers claims arising from wrongful acts committed while acting as a director or officer
  • Protects personal assets of directors and officers from being depleted by lawsuits
  • Covers costly breach response expenses like credit monitoring, forensic investigations, legal support in the event of a data breach
  • Covers claims arising from errors and omissions committed while providing professional services to customers
  • Provides keyperson replacement reimbursement in the event a vital executive passes away
Use Cases
  • Protect directors and officers from claims of wrongful acts
  • Reimburse legal defense costs for directors and officers
  • Cover costs of settlements and judgments
  • Cover costs associated with securities claims and shareholder derivative lawsuits
  • Cover costs associated with employment practices lawsuits
  • Provide crisis management services in the event of a privacy breach or cyber attack to help minimize reputational damage

Based on analysis of insurance rates for similar sized businesses providing computing infrastructure, data processing, web hosting and related services, the estimated average annual premium for Directors And Officers Insurance would be around $5,000 – $10,000. Pricing is usually determined based on factors like annual revenues, number of employees/directors, claims history and risk level of operations.

Estimated Pricing: $5,000 – $10,000

Conclusion

In summary, cyber liability insurance, general liability insurance, property insurance, business interruption insurance, and directors and officers insurance provide layered protection tailored to the needs of companies in the computing infrastructure, data processing and web hosting industries. Maintaining adequate insurance coverage helps protect technology businesses against costly risks and allows them to focus on serving customers.

Frequently Asked Questions

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