What is Technology Industry Errors and Omissions?
Technology Industry Errors and Omissions (E&O) insurance is a professional liability policy that helps protect technology companies, software developers, and IT consultants against claims alleging negligent acts, mistakes, or failures in the performance of professional services. This coverage is focused on liability exposures arising from software defects, implementation errors, consulting advice, and third‑party data loss—distinct from general commercial liability or property coverage.
Who needs it
Typical buyers include software designers, SaaS providers, IT consultants, managed service providers, and other technology contractors. Organizations such as startups, small development teams, and larger vendors all assess E&O to manage liability exposures. Firms in related fields can see tailored options; for example, contractors working on customized systems often review both Errors and Omissions and Commercial Auto exposure if they deliver equipment or provide on‑site services. For related industry guidance, see Technology Errors and Omissions (E&O) Insurance.
What it typically covers
Coverage varies by policy, but common protections include:
- Alleged professional negligence, faulty programming, or missed deadlines
- Claims for failure to deliver promised functionality or performance
- Third‑party data breach or loss tied to a professional service
- Defense costs for covered disputes (often outside the policy limit)
Specialized modules—for example, coverage for software design—may be available; see Software Design Errors and Omissions (E&O) Insurance for more details on options for developers.
Common exclusions or limitations
Policies commonly exclude deliberate criminal acts, bodily injury or property damage that are covered under general liability, and certain contractual liabilities unless specifically endorsed. Intellectual property infringement may be limited or excluded unless purchased as an added endorsement. Underwriting factors and policy wording determine the exact scope, so review exclusions carefully.
Factors that influence cost
Premiums and terms depend on several underwriting factors: company size, revenue, contract values, claim history, software complexity, deployment model (on‑premises vs. cloud), and risk management practices. Higher limits and broader terms generally increase cost. Adding endorsements such as participant accident coverage or expanded cyber liability will also affect pricing.
Proof of insurance & compliance
Many clients and contract counterparts request a certificate of insurance and specific endorsements to meet contractual requirements. Certificates typically show limits and named endorsements, and some customers may require additional insured language or waiver of subrogation. Brokers and carriers can help structure proof of insurance to align with obligations.
How to get a quote
To compare options, gather basic company information, a description of services, revenue figures, and contract samples. If you need assistance or want to discuss requirements, ask your agent for a tailored quote. For more focused programs and occupation-specific guidance, consider resources like Computer Industry Occupations Errors and Omissions (E&O) insurance and Computer Software Design Errors and Omissions Insurance.
Risk scenario
A common example: a client claims a new integration failed and caused lost sales after a software update; E&O can cover defense and indemnity for covered allegations while the incident is investigated and resolved.
Frequently Asked Questions
Do technology E&O policies cover cyberattacks?
Some policies include limited coverage for third‑party data loss related to a professional service, but standalone cyber liability is often needed for broader breach and incident response costs.
Is intellectual property infringement covered?
IP infringement is commonly excluded or restricted. Many carriers offer specific endorsements for IP defense and indemnity, but you should verify availability and limits with your broker.
How much coverage should my company buy?
Appropriate limits depend on contract sizes, potential client damages, and contractual requirements. Discuss your typical contract values and exposure with your broker to determine suitable limits.
Still have questions? Talk to a local insurance expert.