If your business gets hit with a demand letter or lawsuit, your first inclination might be to get rid of the problem as soon as possible. In the tech world, particularly for companies that are just getting off the ground, the last thing you need is expensive litigation to burden your bottom line, or adverse publicity that could give an edge to your competitors.

Most business owners procure basic insurance protection as part of their standard business operations. As the business grows, insurance coverage and limits are broadened. But the pressure to get rid of claims fast can make even the most prudent business executive take a “settle now, check other boxes later” approach. This might be a big mistake—and one that could be easily remedied by taking some simple early steps.

Most insurance policies contain “no action” and/or what is known as “no voluntary payment” or “no voluntary settlement” clauses. These clauses typically look like this:

No insured will, except at that insured’s own cost, voluntarily make a payment, assume any obligation or incur any expense other than for first aid, without our [that is, the insurer’s] consent.

Continue Reading The Risk of Settling Claims Too Quickly

Wildfires have wreaked havoc on, and caused incalculable losses to, individuals and businesses in California over the last three years. These disasters—caused by a series of conflating events, including massive shifts to the climate—are not limited to the Golden State, as fires have devastated many western communities, and fires as well as other unprecedented weather events, including hurricanes, flash flooding, cyclone rains, and extreme-cold freezes have disrupted businesses across the world.

Most businesses know how to protect their physical offices and facilities with commercial property insurance, including business interruption coverage, in case they are directly affected by physical disasters. But, in today’s business environment, a company may be closely tied to and dependent on third-party suppliers. What happens if a major player in your supply chain is adversely affected by one of these (unfortunately) all-too common climate disasters? Unless you operate at ground zero in vulnerable environmental zones, you may not be aware of the fact that your vendors may be the ones most directly affected, and this might have a devastating ripple effect on your ability to operate a successful business.
Continue Reading Are Climate Events Threatening Your Supply Chains?

Why is this technology so exciting?

The National Highway Traffic Safety Administration (NHTSA) has noted that 94% of auto accidents are attributed to some form of human error on the part of drivers. In 2014, there were an estimated 1.25 million deaths worldwide due to vehicle crashes. There is a potential for autonomous vehicle technology to dramatically re-shape these statistics. The Insurance Institute for Highway Safety anticipates that there will be 3.5 million self-driving vehicles on US roads by 2025 and 4.5 million by 2030.
Continue Reading Self-Driving Cars Coming to a Store Near You!

Should you stress if the insurance company issuing the policy that is supposed to be protecting your business—whether in a certificate of insurance you received from a third party or within your own insurance portfolio—is “non-admitted”?  As discussed below, there is no need to sweat.

An “admitted” insurance company is one that has been approved by a state’s department of insurance.  This generally means that the insurance company must file policy forms, underwriting guidelines, and rates with the state for approval.  Admitted insurers also pay into state guaranty funds, which are designed to step in if the insurer becomes insolvent.  Non-admitted insurers, also called surplus lines insurance, are not subject to those same regulations.
Continue Reading How Risky is the Insurance from a Non-Admitted Insurer?

Title III of the Americans with Disabilities Act (ADA) provides that

No individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages or accommodations of any place of public accommodation by any person who owns, leases (or leases to), or operates a place of public accommodation.

42 U.S.C. Section 12182(a). What about a website? Is that a “place of public accommodation”? The answer to that question could make a big difference in determining whether your business faces legal risks and whether you can protect against those risks with insurance. A recent decision out of the Ninth Circuit highlights the split in United States jurisdictions about whether a website is subject to the prohibitions against discrimination found in the ADA. 
Continue Reading Protecting your Website with an EPL Insurance Policy

On November 9, 2018, the Ninth Circuit certified an important coverage question to the Washington Supreme Court about whether a certificate of insurance (COI) purporting to add T-Mobile as an additional insured on another company’s insurance policy binds the insurance company listed on the certificate. T-Mobile USA Inc. v. Selective Insurance Company of America, 908 F.3d 581 (9th Cir. 2018).

The case should serve as a reminder that businesses may not be able to rely on, and should not rely on, a certificate of insurance alone when they sign agreements with third parties who are supposed to add them as additional insureds.
Continue Reading How Valuable is that Certificate of Insurance?

Emerging tech companies face many uncertainties. On the one hand, it’s an exciting environment with eager investors and an expanding market receptive to new high-tech solutions. But there are also risks from cyber disruption, potential product liability claims, and less than trustworthy vendors. Don’t get caught without adequate protections.

Indemnification agreements. Carefully drafted indemnity provisions in your contracts with vendors and other third parties, including suppliers and large customers, can go a long way to protecting your business against various risks that are out of your control. When a claim arises, you will want the indemnitor to step in to address issues as seamlessly as possible. Close attention to the details of your agreements is critical. Don’t rely on standard form provisions that are not tailored to your business. If a dispute arises, you will want to make sure, for example, that you are not bogged down by unfavorable choice-of-law or dispute-resolution provisions. These should be addressed in advance. Keep in mind that an indemnity agreement is only as good as the indemnitor who signs it. If the indemnitor is insolvent or unwilling to step up, then your business is on its own. Insurance is the only way to provide that additional security.
Continue Reading Protecting Your Emerging Business

Welcome to The Perkins Coie Tech Risk Report, a source for updates on, and analysis and interpretation of, insurance issues relevant to emerging technologies. We will address coverage issues related to cyber coverage, privacy, digital assets like cryptocurrency, Blockchain and other emerging technologies. The blog is written for start-ups and other companies dealing with emerging