Tech E&O Insurance
Tech E&O protects technology companies from programming mistakes or incorrect advice they give.
What is Tech E&O Insurance?
Technology Errors & Omissions (Tech E&O) Insurance is a specialized form of coverage for businesses in the technology sector. It provides protection against claims alleging negligence or mistakes in delivering technology services or products, including software, hardware, or consultancy.
Why You Need It
To Protect Against Financial Impact of Lawsuits
Even a small error or omission in a technology service or product can lead to a lawsuit, causing severe financial strain. Tech E&O can cover the legal costs and potential settlement.
To Maintain Professional Reputation
A claim against your company can damage your reputation. With Tech E&O coverage, you can handle claims professionally and maintain client trust.
To Comply with Contractual Requirements
Many client contracts in the technology sector require evidence of Tech E&O insurance. It provides assurance that you have the means to rectify any potential issues arising from your work.
Need Tech E&O coverage for your business?
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What Tech E&O Insurance Covers
Claims of Negligence
Tech E&O covers allegations of professional negligence, such as failing to deliver a service to the agreed standard.
Costs of Legal Defense
The policy includes coverage for legal fees and court costs associated with defending against a claim, whether the claim is valid or not.
Breach of Contract Claims
If a client alleges that your tech company didn't fulfill its contractual obligations, Tech E&O can cover the claim.
Claims Resulting from Data Breaches
If your tech services result in a data breach at a client's business, your Tech E&O policy can cover the resulting claims.
What Tech E&O Insurance Doesn't Cover
Intentional Wrongdoing
Tech E&O does not cover claims arising from deliberate wrongdoing or illegal acts by the company or its employees.
Property Damage or Bodily Injury
These types of claims are typically covered under a general liability policy rather than Tech E&O.
Patent Infringement
Claims of patent infringement are usually excluded from Tech E&O policies, requiring separate intellectual property insurance.
Financial Guarantees
If your technology service or product doesn't yield the financial results you claimed, Tech E&O typically won't cover these types of claims.
Reasons To Have Tech E&O Insurance Coverage
Tech E&O Insurance is a must have for businesses that need:
To Protect Against Financial Impact of Lawsuits
Even a small error or omission in a technology service or product can lead to a lawsuit, causing severe financial strain. Tech E&O can cover the legal costs and potential settlement.
To Maintain Professional Reputation
A claim against your company can damage your reputation. With Tech E&O coverage, you can handle claims professionally and maintain client trust.
To Comply with Contractual Requirements
Many client contracts in the technology sector require evidence of Tech E&O insurance. It provides assurance that you have the means to rectify any potential issues arising from your work.
What Does Tech E&O Insurance Coverage Cost?
Costs can vary based on your location and the specific type of work you perform. Here are some examples of cyber quotes for small to medium-sized businesses:
| Software as a Service - Language Interpreter | Managed Service Provider | Shared Economy | |
|---|---|---|---|
| State | DE | PA | UT |
| Revenue | $6,446,000 | $17,000,000 | $4,100,000 |
| Policy Limit | $3,000,000 | $2,000,000 | $2,000,000 |
| Deductible | $25,000 | $50,000 | $5,000 |
| Annual Cost | $18,407 | $38,983 | $6,080 |
Running a larger or more complex technology company comes with additional risk and increased premiums. Here are some quote examples for larger Tech E&O quotes:
| Freight Shipping and Logistics | Computer Systems Design | Aerospace Designs | |
|---|---|---|---|
| State | TX | MO | CA |
| Revenue | $62,000,000 | $54,787,000 | $210,000,000 |
| Policy Limit | $2,000,000 | $1,000,000 | $3,000,000 |
| Deductible | $25,000 | $10,000 | $150,000 |
| Annual Cost | $24,400 | $33,918 | $58,990 |
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