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The pace of innovation in the technology sector is relentless. From AI breakthroughs to decentralised systems and continuous software deployment, the landscape is evolving faster than ever. For insurance brokers, keeping up isn't just a challenge; it’s a necessity.
According to Markel’s new head of tech, Mark Lowther (pictured), this rapid evolution creates a unique risk environment. “By their very nature, many emerging technologies now change and develop rapidly over short periods of time. This can mean they bring risks that are difficult for organisations to detect and guard against, and underwriters to rate accurately.”
Lowther provided an example of how new risks arise: “Software updates pushed remotely can create vulnerabilities, causing security issues. If a business builds its software using external code – such as open-source code or commercial libraries – it takes on the risks associated with those external sources. These and other scenarios often blur traditional boundaries of liability.”
When traditional insurance falls short, insurance must adapt. “The key to effective coverage is bespoke policies designed around the needs of the sector – insurance designed to deal with fast-growing companies,” Lowther explained. According to Lowther, essential cover can include “professional indemnity, products liability, cyber protection, and intellectual property infringement.” Such policies are “designed to accommodate the operational challenges of tech businesses, addressing everything from data breaches to software failures.”
Emerging technologies blur the lines of accountability. According to Lowther: “Liabilities can fall at all stages of the chain – with the business that develops the technology, deploys it, or benefits from its use. Issues can arise from a raft of scenarios, including incorrect outputs, system failures or data misuse.”
Lowther gave examples such as AI software that may cause unintended bias or errors, and blockchain’s decentralised nature, which can lead to blurred accountability, especially regarding smart contracts.
Blockchain court cases are also on the rise. According to Lewis Silkin’s 2025 report: “The number of cryptocurrency-related claims reaching the English High Court has steadily increased in recent years, with the number of active claims involving digital assets in the High Court in 2025 to date totalling 35.” Lowther emphasised the importance of coverage in these scenarios: “As these risks rise, professional indemnity and cyber liability coverage becomes more essential, given their ability to respond to complex claims where fault isn’t always clear.”
Risk management must be embedded from day one. Lowther noted key exposures for tech firms include “financial loss from product or services liability, cyber and privacy liability, business interruption, system and data rectification costs, and risks from regulatory investigations and fines.” He added, “management risks are another important consideration for tech companies,” highlighting the importance of directors and officers liability cover. To mitigate these risks, Lowther stressed: “Strong cyber risk management is the first step.” He also noted that regular software updates, tight access controls, and staff training will reduce risks. He pointed out that building resilience in product development processes, “through thorough testing and regulatory compliance, can minimise risks down the line.”
Other ways brokers can offer support include:
• Facilitating cybersecurity audits to identify vulnerabilities.
• Advising on regulatory developments like data protection or AI legislation.
• Providing tailored cyber insurance policies.
• Helping clients develop business continuity and disaster recovery plans.
• Offering access to breach response teams.
• Educating leadership teams on digital risk awareness.
• Benchmarking risk maturity against industry peers.
Underwriting must also adapt to match the speed of tech innovation. Lowther explained: “Advancements in cloud computing and data analytics are increasingly enabling insurers to access more granular and timely insights into the tech ecosystem. This is helping to build more accurate risk profiles and supports rating decisions more aligned to real-world risk.”
Analytics also aid in detecting anomalies and streamlining claims handling, improving response times and reducing fraud. Automation is also playing a role. Lowther explained that AI and automation can “filter straightforward risks presented to us by brokers from those that require more underwriter support,” ensuring customers receive tailored coverage. However, Lowther cautioned: “A reliance on system dependencies and errors in automated decision-making will be a challenge for the insurance sector and must be carefully managed.”
From early-stage firms to scaling innovators, brokers must align cover to the business lifecycle. Lowther stressed: “Startups need flexible cover that scales as they grow and responds to their evolving risk profile.” Lowther believes the core stages of many growth tech companies are “start-up, scale-up, established, exit,” and insurance must provide “specific insurance, legal, and tax support at each stage.” He also added that supporting tech business customers with issues like IP protection and patent applications “enables businesses to focus on innovation, knowing their risk exposure is actively being managed by an insurer who understands their sector.”
Brokers can also support start-ups by:
• Providing modular insurance packages that adapt as the company grows.
• Connecting clients with legal support for contracts, partnerships, and data protection.
• Advising on directors’ and officers’ liability cover.
• Helping firms secure funding-readiness, with due diligence support.
• Offering education on risks such as IP theft, cyberattacks, or professional indemnity exposures.
• Facilitating access to tax advice, including R&D tax credits and employee share schemes.
• Introducing risk prevention strategies for lean teams.
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