Oded Oded

In today’s threat landscape, data breaches and cyber incidents are a top concern for all businesses – including tech companies. When people think of data breaches, they often imagine cyber insurance responding to cover costs like forensic investigations, customer notifications, and credit monitoring. That’s correct, but there’s another side to data breaches that tech companies must consider: legal liability to clients, which is where Tech E&O insurance becomes crucial.

“Technology professional liability” is simply another term for technology errors and omissions insurance. In essence, technology professional liability insurance provides the same kind of protection as Tech E&O insurance – it safeguards tech companies and professionals against lawsuits claiming that their professional services or tech products caused a financial loss to a client due to error or negligence.

One of the best ways to understand the importance of Tech E&O insurance is to look at real-world scenarios where it would come into play. Tech E&O claims can arise from a variety of situations in which a tech product or service doesn’t meet expectations or causes a financial loss for a client. Here are some common examples of Tech E&O claims.

Startup culture is all about moving fast, innovating, and pushing boundaries. But amid the rush to build the next big thing, young tech companies can’t afford to overlook an unglamorous but crucial aspect of their business: insurance. Specifically, Technology Errors & Omissions insurance is vital for startups and software companies to secure early on. It might feel like something only large corporations worry about, but in reality, a single lawsuit could be devastating for a startup if it doesn’t have E&O coverage.

Technology E&O insurance isn’t just for big software companies; it’s a critical safeguard for a wide range of businesses in the tech industry. In general, any company that provides a technology-based product or service to clients should strongly consider Tech E&O coverage. This insurance protects you from lawsuits over errors in your work. So if your business could potentially be blamed by a client for a tech mistake or failure, you likely need it.

Tech E&O insurance and cyber insurance are two essential coverages for companies in the tech industry. While they both deal with technology-related risks, they protect against very different threats. Understanding the difference between Tech E&O and cyber insurance will help your business decide which coverage you need – and in many cases, tech companies may need both.

Technology Errors & Omissions insurance is specialized professional liability coverage designed specifically for technology companies, protecting against third-party claims arising from mistakes, errors, or failures in technology products and services that cause financial losses to clients.