Technology Errors and Omissions Insurance

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In a world that is moving at lightning speed with technology, it is an excellent opportunity for many businesses. As an IT business owner, the last thing you want to think about is the fact that you might be sued at some point during your career. Lawsuits are an unfortunate reality in any industry, but now even more so with the technology industry. When purchasing a Technology Errors & Omissions (E&O) insurance policy, it is essential to know what it covers and what it doesn’t. The policy is a Professional Liability insurance policy designed just for technology companies including, but not limited to, software developers, programmers, digital marketers, app developers, and consultants.

What Are Some Common Technology Errors & Omissions Risks?

You probably already know that there are a ton of risks associated with your technology business. Some of the most common include breaches of contract, making bad recommendations, being careless, or making errors or omissions when working on a project. These all sound bad, but sometimes things happen that are unintentional. It is vital to protect your business with a Technology E&O insurance policy to help reduce these risks.

What Does Technology E&O Cover?

Many different insurance companies offer Technology E&O insurance so be sure to read your policy carefully, as they may provide different coverages. There are several that are common throughout all the policies.

  • Network Security – This is the most common claim as of now. An example is if you were responsible for changing a terminated employees login information and fail to do so, this could cause a security breach.

  • Extortion – A hacker may steal information and demand money be paid. Costs involved with a lawsuit – Even if you are found not guilty or no settlement is awarded to the person who sued you, defense costs can be extreme. The policy will provide coverage for this.

Some other common coverages that may be added as a special endorsement onto a Technology E&O insurance policy are Intellectual Property and Media Liability, Business Income (income lost due to a covered claim to keep your business afloat), and Cyber. It is important to note that Technology E&O insurance and Cyber Liability insurance are distinct coverages, so the latter will always need to be added as an endorsement.

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How Much Does Technology Errors & Omissions Insurance Cost?

While each insurance company will be different, you can expect that a Technology E&O insurance policy to start at a minimum of $1,000 annually. The cost will depend on the limit you select, which usually ranges anywhere from $1,000,000 to $5,000,000 depending on how much business you do. There are policies available for higher limits if necessary, some even offering up to $20,000,000. CoverWallet’s team of educated insurance professionals can work with you to determine what limit will best suit your needs.

Frequently Asked Questions About Technology E&O

1. Is Technology E&O insurance the same as Cyber Liability? No, Technology E&O insurance is a policy that protects IT providers of products and services, think the breach of contract or errors made during a contracted job. Cyber Liability insurance whereas protects work that is done via the internet. Most commonly it will cover hacking, digital theft, and destruction of data. The media is flooded with incidents that have happened in the past couple years of stolen credit information, which is where Cyber Liability would come into play.

2. What happens if I can’t operate my business due to a claim? Most insurance companies will have additional coverage available called Business Income. This will pay for your income lost due to a covered claim so that you can keep paying employees and any ordinary operating expenses to keep your business going.

3. Is there a deductible? Many policies have a $0 deductible option; however, you can choose to have a deductible. It is common to see $1,000 or even $2,500 on a Technology E&O insurance policy. Remember, the higher the deductible, the lower the cost of the policy.

4. Won’t my General Liability insurance pay for these instances? Unfortunately, no. General Liability insurance is for bodily injury and property damage (to tangible property) only. The good news is CoverWallet works with many companies that can bundle these coverages which will not only take a lot of stress off of your insurance buying process but maybe even save you money in the long run. Call one of our trusted team members today to get a no-pressure quote for your technology business.

Fill out the easy online application today so we can provide you with a free, no-obligation quote for you. Our insurance programs can be tailored to you and your business, and we will offer it with no-obligation.

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