National · 6 min read
Tech E&O insurance — technology errors and omissions insurance — is the policy that responds when your software, platform, or technology services fail to perform and a customer holds you financially responsible. For a SaaS company, a dev shop, or a managed service provider, it's arguably the single most important commercial policy you'll buy, because it covers the core risk of your business model: the promise that your technology works. This guide explains what tech E&O covers, how it differs from generic E&O, why most modern policies bundle in cyber coverage, and who actually needs it.
Technology E&O insurance is professional liability coverage written specifically for companies that build, sell, or service technology. It protects against third-party claims alleging that your product or services caused a customer financial loss, including: Software failure or defects — outages, bugs, data corruption, or performance failures that damage a customer's business Failure to deliver — missed milestones, failed implementations, or deliverables that don't meet contractual specifications Negligence in technology services — claims that your consulting, integration, hosting, or managed services fell below professional standards Certain contractual liability — breach-of-warranty and breach-of-contract claims tied to your technology's performance Media and IP-adjacent claims — many tech E&O forms include coverage for copyright infringement in content, advertising injury, and similar exposures (patent infringement is almost always excluded) The policy covers defense costs — typically the biggest expense, even for claims that never reach trial — plus settlements and judgments up to your limits.
Traditional E&O was built for accountants, consultants, and real estate agents — professionals selling advice and labor. Software companies sell a product that runs continuously and fails in novel ways. Generic policy forms handle that badly. Key differences: Issue Generic E&O Tech E&O Software/product failure Often excluded as a "product," not a "service" Expressly covered Definition of professional services Narrow, advice-oriented Broad: software, SaaS, hosting, support, development Cyber events Excluded or silent Typically combined in one policy Contractual liability Heavily excluded Carve-backs for tech contract obligations IP/media claims Rarely addressed Often included (excluding patent) An off-the-shelf miscellaneous professional liability policy can leave your actual product in the gap between "professional services" and excluded "products" — which is why working with a broker who specializes in technology company insurance matters more here than in almost any other line.