Tech E&O insurance (Technology Errors & Omissions) provides essential protection against claims of professional negligence. It is particularly vital for companies developing, marketing, or delivering advanced technology services and solutions.
In addition to legal defense, Tech E&O offers peace of mind. It allows you to focus on innovation and growth without fear of crippling lawsuits or contractual disputes. The policy typically covers legal fees, compensation, loss of income, and operational disruptions resulting from covered claims.
Who Needs Tech E&O? This insurance is relevant to a wide range of tech businesses, from startups to global corporations, including
- SaaS and cloud providers
- Software developers and app creators
- IT consulting and implementation firms
- Fintech and AI companies
- Cybersecurity and DevOps teams
- IoT and automation solution providers
- Gaming and ecommerce platforms
- UX/UI designers, system integrators, and more
Key Benefits of Tech E&O Insurance
- Legal Defense: Covers legal costs, court fees, and attorney expenses
- Negligence Claims: Protection from claims related to mistakes or professional errors
- Contractual Disputes: Coverage for failure to deliver on service agreements
- IP Infringement: Includes coverage for claims related to copyright or intellectual property violations
- Cyber-Related Claims: Optional add-on for claims tied to data breaches or digital failures
- Reputation Protection: Covers crisis management and reputational damage expenses
- Frivolous Claims: Protection against baseless or exaggerated lawsuits
- Business Continuity: Keeps your company operational even during legal proceedings
- Confidence to Grow: Required by many clients and investors for contractual engagements
- Customizable Coverage: Tailored to your company’s services, size, and geographic scope
- International Reach: Global coverage options for international operations
Common Claim Examples
- A software bug causes client-side downtime, resulting in a financial loss
- A fintech platform miscalculates interest rates, leading to regulatory action
- A client sues after a failed system implementation causes business disruption
What to Consider Before Purchasing
- Policy limits: Make sure your coverage matches your potential exposure
- Scope of coverage: Understand what’s included – negligence, contracts, IP, cyber
- Client requirements: Align coverage with customer or investor expectations
- Carrier rating: Choose a financially stable and tech-savvy insurer
- Broker experience: Work with a broker who understands your industry and risks
- Exclusions: Be aware of cyber, IP, or other exclusions that could impact your coverage
- Deductibles: Evaluate if the deductible is manageable for your business
- Retroactive date: Ensure coverage includes prior acts and legacy projects
Frequently Asked Questions
What is Tech E&O insurance?
A policy that protects tech companies from claims arising from errors, omissions, or failures in the delivery of professional services.
Why do hi-tech businesses need it?
Because one mistake can trigger lawsuits, lost revenue, or reputational damage. E&O ensures business continuity.
Does it cover my team?
Yes, employees are covered. Contractors may require separate coverage.
Does it cover IP issues?
Yes, the policy can include coverage for intellectual property disputes such as copyright or trademark claims.
Is it legally required?
Not by law, but often required by enterprise clients or contractual agreements.
Does it include cyber coverage?
Only if purchased as an add-on. Tech E&O focuses on professional liability. For cyberattacks and data breaches, consider a dedicated Cyber Insurance policy.
Can it handle international claims?
Yes, if the policy includes worldwide coverage. Be sure to check with your broker.