Technology Errors and Omissions Insurance

Technology E&O insurance is a specialized form of professional liability coverage designed for tech companies. It protects your business against claims of financial loss caused by an error or omission in your products or services. This can include software bugs, negligent service, failure to deliver a promised solution, or system crashes. The policy typically covers legal defense costs, settlements, and judgments, which can be financially devastating without proper protection.

Any business that provides technology products or services should have Tech E&O insurance. This includes software developers, SaaS providers, IT consultants, managed service providers (MSPs), data processors, web developers, and hardware manufacturers. If a client could suffer a financial loss because your technology or service fails to perform as expected, you have an E&O exposure. Many client contracts also require you to carry this coverage before starting a project.

Tech E&O policies cover financial damages your client suffers due to your professional negligence. This includes legal defense costs and settlement payouts for claims related to software bugs, data loss, network downtime, implementation errors, and failure to meet contractual obligations. Many modern policies can be bundled with cyber liability to also cover data breach response costs, regulatory fines, and intellectual property infringement claims, offering a comprehensive safety net.

General Liability covers claims of third-party bodily injury and property damage. For example, if a client slips and falls in your office. Tech E&O, on the other hand, covers financial losses resulting from your professional services or products. If your software crashes and causes your client to lose revenue, that is a financial injury covered by E&O, not General Liability. Tech companies need both policies for complete protection.

It can. Many modern Tech E&O policies are package policies that include cyber liability coverage, as the risks are often intertwined. However, it's not always automatic. It's crucial to review the policy details to see if it covers first-party cyber risks like data breach response and business interruption, or only third-party liability. At Soma, we ensure your policy structure matches your specific data and network security risks.

The cost of Tech E&O insurance varies widely based on several factors, including your company's annual revenue, the type of technology services you provide, the number of clients you serve, your claims history, and your contractual requirements. A small IT consultant might pay a few thousand dollars per year, while a larger SaaS platform could have premiums in the tens of thousands. We work with multiple carriers to find the most competitive pricing.

Key factors influencing your premium include your industry, annual revenue, contract indemnity clauses, risk management practices, claims history, and desired coverage limits. Insurers assess the potential for financial loss your services could cause. For example, a company providing software for the financial sector will likely face higher premiums than one building simple marketing websites, due to the higher potential for significant client losses in case of an error.

At Soma, we specialize in speed and efficiency. Unlike traditional brokers who can take weeks, our streamlined process allows us to provide quotes much faster, often within a few business days after you submit a complete application. For many standard tech businesses, we can bind coverage shortly after you select your preferred quote. Our goal is to get you the protection you need without delaying your business operations or client contracts.