Tech E&O Insurance protects technology providers against claims of negligence, software failure, or service disruptions that cause client financial loss. Crucial for technology related businesses.
Tech Errors & Omissions (Tech E&O) Insurance
What Is Tech E&O Insurance?
Tech E&O is a specialized form of Errors & Omissions Insurance designed for technology companies. It protects against lawsuits resulting from product or service failures, bugs, security flaws, or system downtime that cause financial harm to clients. Often bundled with Cyber Liability coverage, Tech E&O is essential for companies creating or managing digital tools, platforms, or data.
Who Needs Tech E&O Insurance?
Clients rely on your technology to run their businesses. If your product goes down, contains a vulnerability, or doesn’t function as promised, the financial ripple effects can be massive — and you’ll be held responsible. Tech E&O provides a safety net against the unique legal exposures technology providers face.
Common industries that often require Tech E&O Insurance include:
- Technology companies
- SaaS companies
- App and software developers
- IT service providers and MSPs
- Web hosting and cloud service providers
- Payment processors and fintech startups
- AI, machine learning, and analytics firms
What Does Tech E&O Insurance Cover?
Tech E&O Insurance typically covers:
- Lawsuits from service interruptions or system failure
- Bugs, coding errors, and functionality gaps
- Financial loss caused to a client by your tech
- Breach of contract and SLA violations
- Professional service failure
- Some policies include limited Cyber Liability coverage
What Doesn’t Tech E&O Insurance Cover?
While Tech E&O Insurance offers broad protection, it doesn’t cover:
- Cyber breaches (unless included or paired with Cyber Liability)
- Intellectual property infringement (see Media Liability or IP coverage)
- Bodily injury or property damage
- False advertising
- Regulatory fines
How Much Does Tech E&O Insurance Cost?
The cost of Tech E&O Insurance varies based on factors like business size, industry, location, and claims history.
Key Cost Factors:
- Type of technology and use case
- Size and scope of contracts
- Number of users or clients
- Claims history and revenue
Typical Cost Range:
- Startups: $1,000–$3,500/year
- Growth Stage: $5,000–$20,000/year
- Late Stage: $25,000+/year
Risk Management Tips
To minimize potential claims:
- Perform routine vulnerability and penetration testing on your products or platforms.
- Use detailed SLAs (Service Level Agreements) that outline service limitations and exclusions.
- Implement version control and rollback systems in software deployments.
- Maintain a structured product testing and QA environment before releases.
- Monitor and document all system outages and remediation timelines.
- Carry cyber liability coverage in conjunction with Tech E&O to cover digital risks.
Talk to An Expert
Our dedicated experts are ready to provide tailored insurance solutions to clients across a wide range of industries and specialized services.
Schedule a consultation to see how Alliance Risk can reduce your insurance risk.
– We look forward to partnering with you.