Harbor Systems, Inc.

Enterprise workflow software for mid-market logistics and manufacturing operators. Harbor hosts customer operational data, integrates with customer enterprise resource planning systems, and provides implementation services. An exception-handling module released in November 2025 takes defined actions inside customer environments without a person approving each one.

A four-insurer program that is in order at the premises and for employee theft, and thin where Harbor is growing. The automated module now behind a fifth of product usage sits outside the errors and omissions policy, and the program carries half the errors and omissions limit Harbor’s largest customer requires.

Record

Named insuredHarbor Systems, Inc.

EngagementRetained advisory

Policies reviewedTechnology E&O / cyber, D&O / EPL / fiduciary, Crime, Package

Employees / states142 / 17

Next renewal1 March 2027

As of17 September 2026

Review cadenceQuarterly

Next review15 December 2026

Review statusReviewed and current

Reviewed byM. Swantek

As of 17 September 2026

The program at a glance

By line

Technology E&O / cyber58.8%

Management liability31.9%

Package (GL / property)5.6%

Crime3.7%

Limits purchased against limits required

Technology E&O / cyber$5M

Management liability (shared)$5M

General liability$2M

Crime$1M

E&O required by contract$10M

Umbrella required by contract$5M

Scale to $10M. Shading in the dashed bars shows limits in force against the requirement. No umbrella is placed.

Premium

Current term$200,600

Prior term$178,600

Year over year+12.3%

Next renewal1 Mar 2027

The decisions before renewal

Critical

The automated module behind a fifth of product usage sits outside the errors and omissions policy

Effect. An amendment added at the March renewal, four months after the module launched, removes claims caused by software taking action inside a customer’s systems without a person reviewing it first. That describes the exception-handling module. The fastest-growing exposure in the business is carried entirely by Harbor: a single customer dispute over an automated action would be defended and paid out of cash.¹

Recommended course. Have the amendment removed or narrowed at the 1 March 2027 renewal, supported by written documentation of how the module is controlled: what it may do, when a person must approve, how an action is reversed, and what is logged. Approach markets that write this exposure affirmatively in parallel. Amending mid-term is not recommended; it gives up renewal leverage and puts at risk the June 2019 date that governs coverage for past work.²

Chief financial officer and general counsel, with advisor; incumbent broker to market.

1 in 5product actions

Outside the policy as writtenWithin it

Share of product usage running through the exception-handling module, from Harbor’s own product reporting. Claims from the module’s actions meet the March amendment directly.¹

Critical

The insurance promised to Harbor’s largest customer is twice what the program carries

Effect. The governing customer agreement requires $10,000,000 of technology errors and omissions and cyber limits and a $5,000,000 umbrella. The program provides $5,000,000 and no umbrella, and a certificate issued in February states limits Harbor does not hold. That is two exposures, not one: Harbor is short of limits against an indemnity that is uncapped for data incidents, and the shortfall departs from a term Harbor signed, one the agreement lists among its grounds for termination.^3,4,5

Recommended course. Purchase the umbrella and price an excess layer over the existing errors and omissions limit, then correct the certificate once the program matches the agreement. Weigh the added premium against the indemnity it answers, not against current spend.

Chief financial officer; advisor to price the excess layer.

$5Mof $10M required

Limit in forceRequired, not in force

Technology errors and omissions and cyber limit in force, against the $10,000,000 the customer agreement requires. The $5,000,000 umbrella it also requires is not placed.^3,4

Other issues to address

Each of these is material to how the program would respond. The detail view sets out the policy wording behind each one.

MaterialTechnology E&O / cyber

The errors and omissions program costs 12 percent more than last year and responds to less

Premium rose to $118,000 while the renewal added or kept three restrictions beneath the $5,000,000 headline limit.

Compare competing quotes on those three clauses before comparing premium.Advisor, with incumbent broker

MaterialD&O / EPL / fiduciary

One $5,000,000 limit serves the directors, employment claims and benefit plan claims

An open employment matter is already drawing on it, and whatever it consumes is no longer there for the directors.

Price a separate employment practices limit and a layer for the individual directors at the June renewal.Advisor, by 15 April 2027

MaterialCrime

The crime policy does not reach the way $186,000 left Harbor in February

It responds to employee theft and break-ins to Harbor’s systems, not to payments staff were deceived into authorizing.

Add fraudulent payment coverage now rather than at the June renewal, sized to Harbor’s largest routine payments.Chief financial officer; advisor to price, by 15 November 2026

MaterialAcross the program

If the software damages a customer’s goods, neither liability policy clearly responds

The errors and omissions policy excludes property damage and the general liability excludes professional services, so the loss sits between them.

Ask both insurers to confirm their reading in writing, and close the gap by endorsement where they won’t.Advisor, with incumbent broker

MaterialAcross the program

Latch Analytics, acquired in March, is not named on any policy

Its operations, employees and past work sit outside every line as written.

Add the acquired entity to all four policies, with coverage for its past work.Advisor, with incumbent broker, by 1 October 2026

How the program would respond

Nine situations drawn from how Harbor Systems operates, and how the policies as written would be expected to respond. This is an assessment of the wording, not a prediction about any particular claim.

Expected to respond Responds, with a low limit Outside the policy as written Arguable: the wording supports two readings

Situation	Response	Why
A software defect corrupts a customer’s shipment records, and the customer sues	Expected to respond	Technology errors and omissions, $5,000,000, after a $250,000 retention.
The exception-handling module cancels orders in a customer’s system without approval, and the customer sues	Outside as written	The March amendment removes claims caused by software acting in a customer’s systems without human review.
Ransomware takes Harbor’s hosted platform offline for three days	Expected to respond	Cyber, within the same $5,000,000, for response costs and resulting customer claims, subject to the widespread-event clause.
An outage at Harbor’s primary cloud provider takes the product down for two days	Responds, with a low limit	Vendor outages are limited to $1,000,000 within the $5,000,000.
An outage at one of the two data vendors the product depends on	Outside as written	The vendor outage cover names the primary cloud provider only. Neither data vendor is scheduled.
A defective instruction from the software damages goods in a customer’s warehouse	Arguable either way	One reading places the loss in the general liability as damage to a third party’s property. The other places it within the general liability’s professional services exclusion, and the errors and omissions policy excludes property damage outright.
Finance pays a fraudulent invoice after a spoofed vendor email	Outside as written	The crime policy responds to employee theft and system break-ins, not to payments staff were deceived into authorizing.
A former employee alleges wrongful termination	Expected to respond	Employment practices, from the $5,000,000 limit shared with the directors and the benefit plans.
A Latch Analytics customer sues over work done before the acquisition	Outside as written	Latch is not named on any policy, and no policy reaches its past work.

Next ninety days

1 Oct 2026
Add Latch Analytics to all four policies, with coverage for its past workAdvisor, with incumbent broker
15 Nov 2026
Bind the umbrella and add fraudulent payment coverage to the crime policy; correct the February certificateAdvisor
15 Dec 2026
Document how the automated module is controlled, for presentation to underwritersHarbor, with security lead
5 Jan 2027
Errors and omissions submission to market, sixty days before expiryIncumbent broker, to advisor’s instruction
1 Feb 2027
Quotes due; wording comparison and decision meetingAdvisor
1 Mar 2027
Renewal: technology errors and omissions and cyberIncumbent broker

Where the program holds up

Coverage for past work reaches back to June 2019, and holding the errors and omissions insurer to expiry keeps that date intact.
Product failure and a breach of Harbor’s own systems sit on one policy with one insurer, so a single incident does not have to be divided between two.
The crime policy responds to employee theft and computer fraud up to $1,000,000.
Customer B’s requirements, $5,000,000 of errors and omissions and $1,000,000 of crime, are met as placed.
The general liability meets the office lease: $2,000,000, the landlord added, and subrogation waived.

Open the detail view

Coverage schematic

Coverage	Insurer	What it responds to	Limit	Retention	Premium	Expiry
Technology E&O / cyberClaims made	Carrier ANon-admitted, A XV	Failure of the software or services to perform, and breach of Harbor’s own systems. Claims made and reported; covers work performed after June 2019. Vendor outages limited to $1,000,000.	$5,000,000	$250,000	$118,000	1 Mar 2027
D&O / EPL / fiduciaryClaims made	Carrier BAdmitted	Claims against directors, officers, and the company for mismanagement, investor disputes, employment practices, and benefit plan administration.	$5,000,000one shared limit	$100,000	$64,000	15 Jun 2027
Crime	Carrier CAdmitted	Theft of money or property by an employee, and fraud committed by breaking into Harbor’s systems. Payments induced by deception are not included.	$1,000,000	$25,000	$7,400	15 Jun 2027
Package: GL and property	Carrier DAdmitted	Injury to visitors and damage to property at Harbor’s premises, and office contents. Professional services are excluded. Renewal bound for 1 October 2026.	$2,000,000	None	$11,200	1 Oct 2027
Workers compensation	—	Not analysed in this review.	—	—	—	—

Not purchased: potential gaps

Coverage Harbor Systems does not carry, where the absence is worth a decision.

Coverage	What is exposed, and what to consider
Umbrella	Would sit above the general liability and employer’s liability limits. Required at $5,000,000 by the Customer A agreement and the office lease. Purchase decided 5 September 2026; binding scheduled for 15 November.⁴
Excess technology E&O / cyber	Customer A requires $10,000,000; the program carries $5,000,000. An excess layer over the existing limit closes the difference.³
Fraudulent payment	Payments staff are deceived into authorizing sit outside the crime policy. Declined in June 2025 to hold premium flat; the February 2026 loss of $186,000 tested that decision.¹⁰

Cost and retained risk

Total cost of risk, trailing twelve months $411,600

Insurance premiumFour policies, four insurers$200,600

Losses borne by HarborUninsured fraudulent payment of $186,000; $25,000 of retentions paid$211,000

Losses absorbed over the period exceeded the premium paid for the technology errors and omissions program. Workers compensation premium is not included; that policy was not analysed in this review.

Risk retained by Harbor

Per-claim retentions, all lines$375,000

Largest single retention$250,000

Limits required but not purchased$10,000,000

Retained by exclusion or limit

Claims arising from the automated module acting in customer systems
Funds diverted by fraudulent payment instruction
Operations and past work of the business acquired in March 2026
Damage to customer goods caused by a defective instruction
Outages at the two data vendors the product depends on

Observations by policy

Each observation sets out what the policy provides and what that means for the business, and what we recommend. The policy wording each one rests on is listed with it, and numbered markers lead to the passages in the register below.

Technology E&O / cyber

Critical

The fastest-growing part of the product is excluded from the policy that is supposed to cover it

Effect. The technology errors and omissions policy carries an amendment, added at the March renewal, that removes coverage for claims caused by software taking action inside a customer’s systems without a person reviewing it first. That describes the exception-handling module, which launched in November 2025 and now accounts for roughly a fifth of product usage. The fastest-growing exposure in the business is carried entirely by Harbor. A single customer dispute over an automated action would be defended and paid out of cash.

Recommended course. Have the amendment removed or narrowed at the March renewal, supported by written documentation of how the module is controlled: what it may do, when a person must approve, how an action is reversed, and what is logged. Approach markets that write this exposure affirmatively in parallel. Amending mid-term is not recommended; it gives up renewal leverage and puts at risk the 2019 date that governs coverage for past work.

Chief financial officer and general counsel, with advisor; incumbent broker to market.

Policy wording: Carrier A Endorsement 14, Automated Action Exclusion; Declarations Item 7, Retroactive Date^1,2

Material

The errors and omissions program costs 12 percent more than last year and responds to less

Effect. Premium rose from $96,000 to $118,000 at the March renewal while three restrictions were added or kept: the automated-action amendment; a war and widespread-event clause that removes any event affecting many organizations at once, whatever else contributed to the loss; and a $1,000,000 sublimit for vendor outages that names the primary cloud provider but omits two data vendors the product depends on. The headline limit is $5,000,000, but the terms beneath it narrow what that limit will respond to.

Recommended course. Treat the renewal as a wording exercise, not a pricing one. Compare competing quotes on these three clauses before premium, and update the vendor schedule to match the product’s actual dependencies.

Advisor, with incumbent broker.

Policy wording: Carrier A Endorsement 14; Endorsement 11, War and Widespread Event Exclusion, B; Endorsement 9, Dependent Business Interruption Schedule^1,6,7

D&O / EPL / fiduciary

Material

One limit is shared across three unrelated kinds of claims

Effect. A single $5,000,000 limit serves claims against directors and officers, employment claims by staff, and benefit plan claims, and an open employment matter is already drawing on it. With 142 employees in 17 states, employment claims are the most likely source of erosion, and whatever they consume is no longer available to the directors personally. The protection the board believes it has depends on something unrelated to the board.

Recommended course. Price a separate employment practices limit and a layer dedicated to the individual directors at the June renewal. Both are simpler to put in place before a Series C process than during one.

Advisor, by 15 April 2027.

Policy wording: Carrier B Declarations, Item 3, Combined Aggregate Limit⁸

Crime

Material

The crime policy does not cover how money actually left Harbor in February

Effect. The crime policy covers theft of money or property by an employee and fraud committed by breaking into Harbor’s systems, but not payments someone was deceived into authorizing. That is how $186,000 left Harbor in February 2026. The claim was declined, and the wording would produce the same result for the same loss tomorrow. Fraudulent payment coverage was offered in June 2025 and declined to hold premium flat.

Recommended course. Add fraudulent payment coverage now rather than at the June renewal, with a limit sized to Harbor’s largest routine outgoing payments, and pair it with call-back verification for any change to a vendor’s bank details.

Chief financial officer; advisor to price, by 15 November 2026.

Policy wording: Carrier C Insuring Agreement 3, Computer Fraud; Exclusion D.7^9,10

Package: GL and property

Noted

The general liability meets the office lease: $2,000,000, the landlord added, and subrogation waived

Effect. The blanket additional insured and waiver of subrogation endorsements respond to parties Harbor agrees in writing to add, which reaches the landlord under the lease. The umbrella the lease also requires is set out under Across the program, below.

Recommended course. No change needed. Confirm the certificate issued for the October 2026 term shows both endorsements.

Incumbent broker.

Policy wording: Carrier D Additional Insured, Written Contract endorsement¹³

Across the program

Critical

The insurance Harbor has promised its largest customer is twice what it owns

Effect. The governing customer agreement requires $10,000,000 of technology errors and omissions and cyber limits and a $5,000,000 umbrella. The program provides $5,000,000 and no umbrella, and a certificate issued in February states limits Harbor does not hold. That is two exposures, not one. Harbor is short of limits against an indemnity that is uncapped for data incidents, and the shortfall departs from a term Harbor signed, one the agreement lists among its grounds for termination.

Chief financial officer; advisor to price the excess layer.

Contract and policy wording: Customer A master services agreement, sections 11.2(a) and 11.2(d); Carrier A Declarations, Item 4^3,4,5

Material

If the software damages a customer’s goods, neither policy clearly pays

Effect. The errors and omissions policy excludes physical injury and property damage. The general liability policy excludes anything arising from professional services. The software directs material handling in customer warehouses, so a defective instruction that damages goods lands between the two. Each insurer has a respectable argument that the other policy should respond. Harbor funds the defense while they resolve it, and may fund the loss.

Recommended course. Ask both insurers to confirm in writing how they read the overlap. Where they won’t, close the gap by endorsement on one policy or the other.

Advisor, with incumbent broker.

Policy wording: Carrier A Exclusion F; Carrier D Designated Professional Services exclusion^11,12

Material

The business acquired in March is not named on any policy

Effect. Latch Analytics was acquired in March 2026 and appears on none of the four policies. Its operations, employees and past work sit outside every line as written, including claims over work Latch delivered before the acquisition.

Recommended course. Add the acquired entity to all four policies, with coverage for its past work on the errors and omissions policy, and collect Latch’s prior policies to confirm what still responds for its earlier years.

Advisor, with incumbent broker, by 1 October 2026.

Policy wording: Named Insured, Item 1 of each declarations page¹⁴

Insurance required by contract

Counterparty	Requirement, and what the program provides	Position
Customer AMaster services agreement	Requires $10M errors and omissions and cyber, a $5M umbrella, and the customer added to the general liability policy. The program provides $5M, no umbrella, and the additional insured wording is unconfirmed.	Short of requirement
LandlordOffice lease	Requires $2M general liability with the landlord added and subrogation waived, plus a $5M umbrella. The general liability requirement is met; the umbrella is not in force.	Short of requirement
Customer BOrder form and security addendum	Requires $5M errors and omissions and $1M crime. Both are met by the program as placed.	Met

Decisions and next steps

Decided Scheduled Exposure open

Date	Item	Owner	Status
10 Jun 2025	Fraudulent payment coverage declined to hold premium flatRetained in full; tested by the February 2026 loss of $186,000	Chief financial officer	Reversal scheduled
12 Aug 2026	Hold the incumbent errors and omissions insurer to expiry rather than amend mid-termAutomated-module exposure retained until 1 March 2027; acknowledged in writing	Chief financial officer and general counsel	Decided
5 Sep 2026	Purchase umbrella limits mid-term rather than wait for the 2027 package renewal	Chief financial officer	Decided
1 Oct 2026	Add the acquired business to all four policies, with coverage for its past workOperations and past work uninsured until endorsed	Advisor, with incumbent broker	Outstanding
15 Nov 2026	Bind the umbrella and add fraudulent payment coverage to the crime policy, then correct the February certificate	Advisor	Scheduled
15 Dec 2026	Document how the automated module is controlled, for presentation to underwriters	Harbor, with security lead	Scheduled
5 Jan 2027	Errors and omissions submission to market, sixty days before expiry; quotes due 1 February	Incumbent broker, to advisor’s instruction	Scheduled
15 Apr 2027	Separate the employment practices limit and add a layer for the individual directors, ahead of the June renewal	Advisor	Scheduled

Open items

Item	Relates to	Owner	Priority	Due
Latch Analytics: prior policies, customer contracts, and any claims or demands received since 2023.	Program	Harbor	High	1 Oct 2026
Written description of the automated module’s controls: permitted actions, approval points, reversal, and logging.	Technology E&O / cyber	Harbor, with security lead	High	15 Dec 2026
Third-party data and service vendors the product depends on, for the vendor outage schedule.	Technology E&O / cyber	Harbor	High	15 Dec 2026
Open employment matter: defense spend to date and current reserve.	D&O / EPL / fiduciary	Harbor	Medium	15 Oct 2026
Certificates issued to customers since March 2026, and the limits each one states.	Program	Incumbent broker	Medium	15 Oct 2026
Largest routine outgoing payments and the current approval process, to size fraudulent payment coverage.	Crime	Harbor	Medium	1 Nov 2026

If something happens

The first day of any incident, claim or letter. Reporting deadlines, methods, and insurer addresses for each policy are kept with this record.

Call the advisor before communicating with any insurer. Notice language can’t be retracted.
Preserve logs, ticketing records, and code state; suspend routine deletion.
Suspected fraudulent payment: request a recall through the originating bank the same day.
Security incidents: use the insurer’s approved counsel and forensics, or costs may be contested.
Make no admission of fault and no written commitment to remediate before notice is given.
Escalate to the CFO and general counsel; notify the board as required.

Scope and sources

Documents reviewed: Carrier A technology errors and omissions and cyber policy, with endorsements, 1 March 2026 to 1 March 2027
Carrier B management liability policy (D&O, EPL, fiduciary), 15 June 2026 to 15 June 2027
Carrier C crime policy, 15 June 2026 to 15 June 2027
Carrier D package policy (general liability and property), bound for 1 October 2026 to 1 October 2027
Customer A master services agreement; Customer B order form and security addendum; office lease
Requested, not yet received: Latch Analytics prior policies and contracts; vendor dependency list; automated module control documentation.
Outside this review: Workers compensation; employee benefit and health plans.
How positions were checked: Every position rests on quoted policy or contract wording: 14 passages in this sample, 10 matched word for word against the document text by software and 4 read and confirmed by the advisor.
Review: Prepared by Swantek Advisory Services and reviewed by M. Swantek on 17 September 2026. Record revision 4.

Policy wording register

#	Where	Wording	Checked
1	Carrier A Endorsement 14, Automated Action Exclusion, A	“This insurance does not apply to any Claim based upon or arising out of any action taken by Your Technology Product within a third party’s system without prior review and approval by a natural person.”	Read by the advisor
2	Carrier A Declarations, Item 7, Retroactive Date	“Retroactive Date: June 1, 2019”	Matched by software
3	Customer A master services agreement, section 11.2(a)	“Technology errors and omissions and cyber liability insurance with limits of not less than $10,000,000 per claim and in the aggregate”	Read by the advisor
4	Customer A master services agreement, section 11.2(d)	“Umbrella or excess liability insurance with limits of not less than $5,000,000”	Matched by software
5	Carrier A Declarations, Item 4, Limit of Liability	“$5,000,000 each Claim and in the aggregate”	Matched by software
6	Carrier A Endorsement 11, War and Widespread Event Exclusion, B	“arising out of any Widespread Event, regardless of any other cause or event contributing concurrently or in any sequence to the loss”	Read by the advisor
7	Carrier A Endorsement 9, Dependent Business Interruption Schedule	“Scheduled Provider: Primary Cloud Provider. Sublimit of Liability: $1,000,000”	Matched by software
8	Carrier B Declarations, Item 3	“$5,000,000 Combined Aggregate Limit of Liability for all Coverage Parts”	Matched by software
9	Carrier C Insuring Agreement 3, Computer Fraud	“resulting directly from the use of any computer to fraudulently cause a transfer of money”	Matched by software
10	Carrier C Exclusion D.7	“loss resulting from the transfer of money induced by any person acting under false pretenses”	Read by the advisor
11	Carrier A Exclusion F	“for bodily injury, sickness, disease or death of any person, or damage to or destruction of any tangible property”	Matched by software
12	Carrier D Exclusion, Designated Professional Services	“due to the rendering of or failure to render any professional service”	Matched by software
13	Carrier D Additional Insured, Written Contract endorsement	“any person or organization for whom you are performing operations when you and such person or organization have agreed in writing”	Matched by software
14	Carrier A, B, C and D Declarations, Item 1, Named Insured	“Harbor Systems, Inc.”	Matched by software