Technology erros and omissions insurance

Technology Errors & Omissions (E&O) Insurance

Get business insurance with optimized coverage to meet your exact needs

Or call for advice and customised recommendations.

What is Technology Errors & Omissions (E&O) Insurance?

Tech Errors and Omissions (E&O) Insurance, also known as technology E&O coverage or professional liability insurance for the technology industry, is a specialized insurance product designed to protect businesses operating in the tech sector from financial losses arising due to mistakes, errors, negligence, or product failures in the products or services they provide.

This coverage goes beyond traditional liability policies, addressing specific risks associated with technology-related operations.

Why Do You Need Tech E&O Insurance?

As technology becomes the backbone of modern business operations, the potential fallout from errors and omissions has never been more significant.

Imagine the financial impact if your IT consulting services inadvertently led a client to adopt a flawed technology strategy, causing financial setbacks and potential legal disputes, or if the mobile application your company developed experienced functionality issues, resulting in dissatisfaction among users and potential financial losses for your client.

In tech, clients value Tech Errors and Omissions (E&O) Insurance because it protects them if your mistakes lead to financial losses. It's their way of ensuring they won't face negative impacts from any errors or negligence on your part while relying on your expertise for sound advice or quality work.

It's a proactive measure to secure both parties against unforeseen challenges in the dynamic tech landscape. Most tech clients will require you to have this coverage.

Whether you're a software developer, IT contractor, technology startup, or part of the fintech industry, this insurance ensures 360-degree protection.

What Tech Errors & Omissions Insurance Is All About:

NEW - DESKTOP - Errors and omissions infographic

What Does Tech E&O Insurance Cover?

Frequently Asked Questions

What Do I Need to Know About Errors & Omissions Insurance?

Tech E&O Insurance is often overlooked by new tech companies, unaware of its critical role. Tailored for the tech industry, it safeguards against claims related to "errors" and "omissions," providing vital protection for your business.

This coverage addresses a broad spectrum of issues, specifically aiming to help your tech company handle potential damages arising from professional service mistakes. In the tech sector, where tasks and advice are integral, human errors are inevitable.

If a client perceives an error in your work or an omission in the contracted service, your business may face liability for negligence or a breach of contract. Technology E&O Insurance steps in to mitigate these costs.

While some clients might not pursue legal action for mistakes, not every client shares this leniency. Costly errors can prompt legal claims, especially with larger contracts, exposing your tech company to significant legal consequences.

Who Is Covered by Errors & Omissions Insurance?

Your Tech Business and Employees:

As the owner, your tech business, and its employees are covered for claims arising from contracted work. All professional services offered for a fee, as detailed in your insurance application, should fall under the protective umbrella of Tech E&O Insurance.


Even if you enlist subcontractors for specific projects, their errors or omissions resulting in financial loss to the customer are generally covered under your policy. Whether it's a one-time collaboration or ongoing assistance, your Tech E&O Insurance provides a safety net against potential liabilities.

What Does Technology E&O Insurance Cover?

Tech Errors and Omissions (E&O) Insurance provides coverage for various risks associated with mistakes, errors, or negligence in the technology industry. Key coverage areas include:

1. Legal Defense Costs and Consultation:

Covers legal fees, attorney expenses, court costs, and the costs of legal consultations, whether defending against a lawsuit or addressing potential issues proactively.

Example: Imagine your tech company develops a critical software solution for a client. After implementation, unforeseen glitches surface, causing disruptions and financial losses for the client's business operations. Faced with potential legal action, your Tech Errors and Omissions Insurance steps in.

2. Settlements and Judgments:

Pays for settlements or court-ordered judgments if the tech company is found liable for covered claims.

Example: following the previous example, Tech E&O Insurance acts as a financial safeguard, covering the costs of settlements or judgments resulting from product or service failures.

It ensures your business can address and resolve claims without bearing the full financial burden, preserving your company's stability and reputation.

3. Negligence, Errors, and Breach of Duty:

Protects against claims of negligence, errors, omissions, and allegations of breach of professional duty in the tech sector.

Example: Your team provides IT consultancy services, guiding a client through a critical system upgrade.

Due to an oversight, a key aspect of the upgrade is missed, leading to operational inefficiencies and financial losses for the client. Alleging negligence and breach of duty, the client pursues legal action.

4. Product Failures and Misrepresentation:

Covers financial losses, legal expenses, and claims related to failures or defects in technology products, as well as misrepresentation leading to financial losses for clients.

Example: Your tech company launches a cutting-edge Saas, marketing it as a solution for seamless business operations.

However, undisclosed defects in the software surface after widespread adoption, causing disruptions and financial losses for your clients.

5. Intellectual Property Liability:

Includes coverage for intellectual property claims (e.g., copyright or trademark violations)

Example: Your web development company creates a visually stunning website for a client, incorporating various design elements. Unbeknownst to your team, a specific graphic closely resembles an existing copyrighted image owned by another entity. The copyright owner identifies the similarity and accuses your company of infringement, leading to legal action.

6. Retroactive Claims:

Coverage for claims related to errors from previous contracted work.

Example: As an IT consultant, your company provides strategic guidance for a client's network infrastructure. Months after completing the consultation, a critical oversight in the recommended configuration surfaces, leading to system vulnerabilities and potential data breaches.Your client would hold you liable.

It's crucial to note that obtaining insurance tailored to your business and specific needs is essential. Seek advice from an expert insurance agent to ensure you have coverage for your unique situation.

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.

What Are the “Limits” on a Tech Errors and Omissions Insurance Policy?

In the realm of technology, the typical liability limit for Tech Errors & Omissions insurance in small businesses is $1,000,000 per claim. As your sales or company assets surpass the $1M mark, it's advisable to contemplate higher limits for enhanced coverage.

For larger corporations, the expectation for professional services vendors, especially in the tech industry, is often set at $5M or even $10M.

This elevated standard aligns with the growing complexity and scale of Technology Errors & Omissions requirements.

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.

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.

Tech E&O vs Cyber Liability: What Are The Differences?

Tech E&O Insurance:

  • Focus: Primarily addresses professional mistakes, errors, omissions, and negligence in the products or services provided by a tech company.

Coverage Examples:

  • Software errors causing financial losses for clients.
  • Failure to meet project deadlines resulting in client losses.
  • Misrepresentation in technology-related advice leading to financial harm.

Cyber Liability Insurance:

  • Focus: Centers around risks related to data breaches, cyberattacks, and the compromise of sensitive information.

Coverage Examples:

  • Financial protection in the event of a data breach exposing client or employee information.
  • Coverage for costs associated with notifying affected parties after a cybersecurity incident.
  • Legal expenses arising from lawsuits related to data breaches.

Key Differences:

Tech E&O is more about professional services and products, addressing mistakes or failures in what a tech company provides.

Cyber Liability is specifically tailored for risks associated with data breaches, cyberattacks, and the protection of digital assets.

For comprehensive coverage, businesses often choose a combination of both Tech E&O and Cyber Liability insurance, ensuring a robust risk management strategy in the dynamic landscape of the tech industry.

Are You Ready to Get Covered?

Prefer to speak with a CoverWallet consultant? Call