Cyber threats have become an unavoidable reality in the modern tech landscape as they escalate in frequency and impact. Whether you're building infrastructure, managing user data, or deploying SaaS platforms, your business is a prime target. It’s critical to recognize that your operation has significant exposure to unique risks that standard policies often overlook. As such, securing the right technology insurance is a strategic necessity for safeguarding your growth, clients, and intellectual property.
This report provides helpful insights and practical advice regarding the significant cyber liability challenges confronting technology companies today and highlights the importance of a proactive, consulting-led insurance strategy.
What You Will Learn
- Human Error and Insider Threats
- Third-Party and Vendor Breaches
- Ransom and Extortion
- Intellectual Property and Trade Secret Theft
- Regulatory Noncompliance and Data Privacy Violation
- Fuel Your Tech Company's Growth With the Right Protections
1. Human Error and Insider Threats
Human error is often the weakest point in cybersecurity. SC Media cites findings from Mimecast’s State of Human Risk report showing that 95% of data breaches involve human error.
Even simple errors, such as misconfigured servers, phishing clicks, and reused passwords, can lead to catastrophic breaches. These insider threats — negligent or malicious — can be harder to detect than external attacks.
As part of a broader technology insurance strategy, a modern cyber liability policy will deliver protections that include robust employee training support, access management controls, and rapid response services to limit damage.
2. Third-Party and Vendor Breaches
Many tech companies rely on third-party vendors for cloud storage, payments, or user authentication. But outsourcing services doesn't outsource liability. In fact, it often introduces additional risk.
In 2022, 20% of data breaches involved third parties, often causing major financial and reputational damage. Threat actors may target vendors for the sensitive data they handle, yet organizations often struggle to track who has access to what. Siloed systems and manual processes make vendor risk assessments difficult and time-consuming.
A breach at a vendor can impact your customers and brand, even if your own systems are secure. These risks often fall into insurance gray areas. Working with an independent Sahouri Advocate ensures your policy covers third-party integrations and vendor dependencies. We can help you understand your unique risks and find the best coverage for your business.
3. Ransomware and Extortion
Ransomware attacks have grown more sophisticated and targeted. Criminals now focus on exfiltrating data, corrupting backups, and disrupting core services.
- In 2024, U.S. ransomware attacks resulted in record-breaking financial losses, with the FBI estimating a total impact of $16.6 billion, marking a 33% increase from the previous year and highlighting the growing threat to organizations, according to Insurance Business magazine.
- The 2024 Sophos State of Ransomware Report found that the average cost of recovering from a ransomware attack, excluding ransom payments, surged to $2.73M — nearly $1M higher than in 2023. This finding highlights the growing financial burden of cybersecurity incidents.
Attacks can lock down proprietary code, compromise user data, or freeze access to mission-critical systems. The fallout includes financial loss, reputational harm, business interruption, and legal scrutiny.
Integrated cyber liability coverage helps you respond fast. Look for policies that deliver extortion coverage, legal and forensics support, and coordinated recovery services under one umbrella.
4. Intellectual Property and Trade Secret Theft
According to the Ponemon Institute’s 2023 Cost of Insider Threats Report, malicious insiders caused an average of 6.2 cybersecurity incidents, each costing around $701,500. IP theft can lead to costly litigation, lost market opportunities, and reputational harm.
Some of these incidents may trigger both cyber and errors and omissions (E&O) claims, highlighting the need for coordinated coverage. That’s why a strategic insurance partnership should take a consultative approach, analyzing your business model and specific risks.
Sahouri ensures your cyber liability and E&O coverage are integrated to reduce gaps, protect your IP, and preserve business continuity. Our goal is to help prevent cyber incidents where possible and ease the financial impact when negligence claims arise.
5. Regulatory Noncompliance and Data Privacy Violations
Tech firms handling personal, health, or financial data must meet strict regulatory standards, often across multiple jurisdictions.
- On September 3, 2024, the Dutch Data Protection Authority (AP) fined Clearview AI €30.5 million for illegal data collection practices.
- The California Privacy Protection Agency (CPPA) imposed $632,500 in fines on a global vehicle manufacturer for violating consumer privacy rights, including excessive verification requirements and improper cookie management.
Violations of GDPR, CCPA, HIPAA, and other rules can lead to steep fines or lawsuits. Even accidental noncompliance carries significant legal exposure.
A comprehensive cyber liability insurance plan, integrated with other types of coverage such as E&O insurance, provides a safety net for your business. It covers regulatory response costs, legal defense, and settlements.
Fuel Your Tech Company's Growth With the Right Protection
Every tech company faces risk. However, proper protection can turn risk into resilience.
Human error, vendor breaches, ransomware, IP theft, and compliance failures are rising daily throughout the industry. An independent, technology-driven insurance brokerage like Sahouri delivers proactive, integrated solutions that evolve with your business. Contact us to connect with a Sahouri Advocate and discover how our consulting-based technology insurance is designed to fuel your growth and protect your assets.
