Technology Errors & Omissions Insurance

Technology E&O focuses on the promised performance of technology products and services. A software defect, unsuccessful migration, or support error can disrupt a customer's operation without producing conventional bodily injury or physical property damage. The policy should identify the actual services and products that generate revenue.

Definitions matter for developers, consultants, managed service providers, resellers, and businesses that combine hardware with software. A form accepting software development may not automatically include payment processing, implementation, outsourced support, or a new hosted platform. Review subcontracted work and dependencies rather than treating every technology activity as interchangeable.

Most technology E&O forms are claims-made. Retroactive dates, notice requirements, and knowledge of existing problems deserve attention before a renewal or switch. A combined cyber form may use common limits or separate sections; the business needs to know how an incident involving both security and performance allegations would draw on them.

For profession-specific professional liability guides and quotes, see errors and omissions guides by profession at US Professional Insure, Provident Financial Group's professional liability division.

• Failed implementation. Client financial loss from a software or systems implementation that failed to meet contracted specifications or timelines. Example: Failed implementation is evaluated when a customer alleges loss from a software or implementation failure; the specific coverage conditions still apply.
• Missed service-level agreements. Liability from failing to meet contracted uptime, response time, or performance commitments. Example: Missed service-level agreements is evaluated when a customer alleges loss from a software or implementation failure; the specific coverage conditions still apply.
• Defective code or design. Loss caused by a coding error, design flaw, or product defect in delivered software. Example: Defective code or design is evaluated when a customer alleges loss from a software or implementation failure; the specific coverage conditions still apply.
• Integration failure. Liability arising from a failed or faulty integration between the insured's technology and a client's systems. Example: Integration failure is evaluated when a customer alleges loss from a software or implementation failure; the specific coverage conditions still apply.
• Negligent professional services. Claims from consulting, configuration, or advisory work performed in connection with the technology. Example: Negligent professional services is evaluated when a customer alleges loss from a software or implementation failure; the specific coverage conditions still apply.

• Data breach and unauthorized access. Security incidents, breach response, and notification costs are addressed under cyber liability, not tech E&O.
• Bodily injury and property damage. Physical harm or damage claims fall under general liability rather than this policy.
• Intentional misrepresentation. Knowing misstatement of the product's capabilities is not covered.
• Ransomware and extortion costs. These are cyber liability exposures, not performance-failure exposures under tech E&O.

• IT & Tech Consultants — Review this coverage alongside the organization's actual operations and agreements.

Client requirements can specify E&O, cyber, limits, continuity, and particular contractual protections. A service-level agreement may impose credits, penalties, or performance warranties that the policy does not reimburse. Compare the indemnity and liability clauses with the insured services and contract exclusions before signing.

Security certifications and compliance duties are not insurance policies. Neither an audit report nor a certificate of insurance resolves every allocation of risk between vendor and client. Requirements change and should be confirmed with the relevant state authority or a licensed agent; qualified counsel should review unusual service commitments.

Source for general insurance obligations and coverage distinctions: Get business insurance.

1. Contract terms. Limitation-of-liability and indemnification language in client agreements affects underwriting.
2. Criticality of the technology. Systems central to a client's core operations carry more exposure than peripheral tools.
3. Development and QA practices. Documented software development lifecycle and testing discipline can improve terms.
4. Claims history. Prior E&O claims or disputes affect availability and pricing.
5. Client concentration. Reliance on a small number of large clients can increase severity potential.

Use written scopes, acceptance criteria, change controls, testing records, and incident escalation procedures. Document client approvals before modifying production systems. A clear service boundary helps distinguish an insured professional error from work the customer never authorized.

Compare proposals with identical services, revenue, client geography, retroactive dates, and deductibles. Review outages, intellectual-property allegations, contractual liability, and cyber coordination. A narrow service definition can make a proposal look economical while removing the activity responsible for most of the firm's revenue.

Match the form to the company's products and delivery model. Ask how a hosted-software failure, configuration mistake, or subcontractor error would be evaluated. Review the treatment of service-level penalties, warranties, and refund obligations; they are not automatically covered financial damages.

Check financial strength, claims counsel arrangements, defense-cost treatment, and consent provisions. For a combined policy, compare the security and professional sections independently. Consider customer concentration and whether one widespread product issue could create related claims sharing a single limit.

Prepare service and product descriptions, revenue breakdowns, contracts, subcontractor arrangements, controls, and loss information. Provide the current policy to verify continuity. Explain planned product launches and material scope changes so the quote does not reflect an obsolete business model.

Confirm binding, effective dates, insured services, and reporting contacts before promising evidence to a customer. Certificates summarize active protection; they do not amend warranties or accept every contractual demand. Allow time for insurer review of unusual customer language rather than treating procurement deadlines as automatic approval.

Report a demand or reportable circumstance within the policy's notice conditions. Preserve version history, tickets, deployment records, contracts, testing, and customer communications. Operational fixes may be necessary, but they should not destroy the evidence needed to understand the alleged failure.

The insurer evaluates insured services, timing, covered damages, and exclusions. A customer requesting a refund does not automatically establish an insured claim, while a disputed allegation may still trigger defense. Coordinate cyber reporting if the same event also involves unauthorized access or exposed records.

Cyber insurance addresses security response, privacy liability, and covered digital interruption rather than every service-performance failure. General liability remains relevant for visitor injuries and physical damage. Commercial property protects office equipment subject to the form, while crime protection addresses eligible direct theft.

EPLI and D&O protect different employment and leadership exposures as the technology business grows. Compare generic professional liability with technology-specific E&O to verify product and service definitions. The related guides below help distinguish overlap from a genuine coverage gap.

• Cyber vs technology E&O