‘Predict, prevent, insure’: New Tech E&O coverage addresses AI bias head-on

Technology Discrimination Liability – the new must-have coverage for Canadian businesses

When BOXX Insurance set out to create a new Technology E&O product, their team did so with one goal in mind – to create a more digitally safe world for tech companies of all sizes.

This new coverage was built for brokers serving fast-moving, next-generation technology companies, everything from SaaS providers to AI platform builders, who need E&O coverage that keeps pace with their clients’ innovation and the tech world overall. This product focuses on technology errors, omissions and professional liability – distinct from cyber insurance, but designed for companies whose operations are inherently digital.

“We’re not only protecting the end customer from cyber-related events, we’re now also protecting the companies that are providing the technology,” added Jonathan Weekes, president at BOXX Insurance.

“Reflecting on our journey as an insurtech ourselves, we wanted to find ways to offer coverage that we knew technology companies would need,” added Erik Tifft. “And so we challenged ourselves to find areas where we could improve coverage – covering things that’re top of mind for technology companies today.”

And as the team dug deeper into current market offerings, gaps in coverage became apparent. As Tifft told IB, traditional forms of Tech E&O coverage don’t always keep up with the constantly evolving language and technology of today. As such, BOXX made a concerted effort to explicitly cover certain risks that they know are critically important to tech companies.

“Artificial intelligence, large language models, things of that nature,” revealed Tifft. “Tech E&O by BOXX spelled out coverage for those new technology exposures which are becoming a ubiquitous part of the insured’s day-to-day activities. We thought that was important.”

Technology Discrimination Liability Coverage

However, Tifft and his team of experts also saw some issues arising from these new models. Historically, there have been claims around discrimination laws regarding accessibility of websites – something that’s only intensified with the advent of AI.

“Artificial intelligence has been accused of applying criteria, selecting for and against people, in a way that may be discriminatory in the eyes of the law,” added Tifft. For technology companies using AI-driven decision-making – or building platforms that embed it – this exposure is no longer theoretical. “We created a coverage called Technology Discrimination Liability to address that – it’s a new coverage that addresses the allegation of algorithmic bias we’re seeing crop up with the use of AI models.”

In some cases, this means introducing new affirmative coverage, and in others it means explicitly clarifying areas that have historically been vague or silent.

It’s this Technology Discrimination Liability that really sets BOXX apart from the crowded market. Currently, there’s a huge gap in coverage here – one that is leaving tech companies wide open to lawsuits in the digital age.

“Disability claims regarding the accessibility of a website have been relatively minor historically,” added Tifft. “But with the rapid deployment of AI across every sphere of industry, it’s become a very obvious concern. Tech companies need some element of coverage – they need an insurer who’s able to give them a backstop even if they’ve done everything right and they’re still hit with a claim.”

“BOXX’s motto is predict, prevent and insure. It’s obvious there’s exposure – we predicted it. We’re aiming to prevent it through disciplined underwriting; challenging our insureds on governance, controls and decision-making processes before a claim ever arises. And, of course, we’re insuring them if the worst happens.”

Tech E&O that keeps pace with modern technology and cyber risk

Because technology is evolving at an exponential pace, organizations need their errors and omissions coverage to evolve alongside it. With BOXX, their team of industry experts is staying close to evolving risks and is making sure that their policy form is keeping up with the latest technology advancements.

“These companies are operating in good faith,” added Tifft. “We want to offer them coverage for that exposure in case something does go wrong. We also recognize that in the cyber extortion area, there are new issues arising. It’s not just about data being encrypted or stolen, there are threat actors who’re corrupting data sets in unknown ways, then requiring payment to get details of how the data has been manipulated. As such, we added affirmative coverage for this data poisoning as well.”

And, with AI and blockchain rapidly reshaping industry norms, Tifft believes all of this evolution must be continuous and not just occasional.

“Blockchain is firmly covered in our Tech E&O form along with the Internet of Things. As we all know, tech has changed dramatically – the nature of technology exposures has changed in the last 10 years. So it’s important as an insurer to pay attention to what’s happening and address those changes in our policy wording.”

At its core, this clarity matters for brokers as much as insureds – specificity makes the product easier to explain, place and defend.

“Insureds want the comfort of seeing what they’re doing addressed specifically in the product,” added Tifft. “We’re open about what we’re covering and how we’re covering it by using wording that addresses these things.”

‘Tech E&O by BOXX is not just for startups – it’s for the full suite of tech companies’

Another key differentiator lies in BOXX’s expertise in cyber and its direct connection to the cybersecurity and IT communities – gaining insights ahead of broader industry awareness. Here, instead of waiting for claims trends to surface, BOXX listens to the experts building and protecting today’s technologies and takes a lead from them.

“When Erik and the team were working on this wording, they really made sure that we understood the exposures our clients are actually concerned about. [From there, it’s about] addressing those now rather than waiting for them to become a bigger challenge,” added Weekes.

Importantly, this coverage isn’t just for SMEs – it’s for technology companies of all sizes that are seeking coverage. And, with Canada becoming a tech hub, this type of support can’t come soon enough. Being a cyber expert, BOXX also recognizes that digital exposures are business as usual for tech services and companies. That’s why Tech E&O by BOXX also includes Cyberboxx® Business, their all-in-one cyber insurance and protection offering for businesses.

“Cyber exposures are intrinsic to tech services – it’s just the nature of it. Network security issues, privacy concerns and outages, downstream failure of a vendor that the technology company relies on – these are all exposures that are intrinsic to cyber coverage which we’re extending through our technology form.”

Discover how BOXX’s new Tech E&O is designed and worded to address real-world technology and cyber liability risks, in an exclusive webinar with president Johnathan Weekes.