Technology powers nearly every business, and with that comes responsibility. When your product, code, or service fails to perform as promised, clients can face downtime, lost revenue, or reputational harm and may hold your company accountable.

Technology Errors and Omissions (Tech E&O) insurance protects your business from those financial consequences. It covers legal defense costs, settlements, and judgments if your company is accused of making a professional mistake that causes a client loss.

What Tech E&O Insurance Covers

Tech E&O coverage applies when a client claims that your professional services, technology product, or advice caused them financial harm. It includes both defense costs and any settlements or judgments that arise from covered claims.

The policy typically covers:

Service Errors or Failures

Protection for financial losses caused by mistakes in the delivery of technology services. This could include issues like a failed integration or a malfunctioning platform that prevents clients from completing business-critical operations.

Professional Negligence

Coverage for claims that your company failed to meet accepted professional standards. For example, a consulting or configuration error that results in data loss or delays a client’s ability to launch their product.

Missed Deliverables or Deadlines

Coverage when delayed or incomplete projects lead to client losses. If your team misses a contracted delivery date or fails to meet key milestones, resulting in penalties or lost revenue for the client, this protection applies.

Breach of Contract or Warranty

Protection against claims that your technology or service did not perform as promised. A client alleging that your software failed to meet uptime or functionality guarantees would fall within this category.

Accidental Intellectual Property Infringement

Coverage for unintentional use of copyrighted, trademarked, or proprietary material in your work. This often applies when code, content, or designs are reused or licensed incorrectly.

Third-Party Data Breach Liability

Protection for situations where a vulnerability in your product or service leads to a client’s data breach. The policy can help cover the cost of legal defense and client reimbursements related to that event.

Employee Errors or Misrepresentation

Coverage for mistakes made by employees or contractors performing work on behalf of your company. If an implementation error or miscommunication causes a client financial loss, this part of the policy applies.

Legal Defense, Settlements, and Judgments

Reimbursement for legal expenses, court costs, and settlements related to covered claims. Tech E&O pays for defense even when the lawsuit has no merit, ensuring your company can respond effectively without disrupting operations.

How much coverage you have will determine the cost of your policy. Learn more about how much Tech E&O costs.

Traditional E&O Insurance Coverage vs Tech E&O Insurance Coverage 

Errors and Omissions (E&O) insurance, also called professional liability insurance, protects your company against claims that their professional advice, services, or deliverables caused a client financial loss. It applies across industries such as consulting, accounting, design, and law.

A standard E&O policy generally covers:

• Professional negligence: Mistakes, oversights, or poor advice that lead to client losses.
• Failure to deliver contracted services: missed deliverables, deadlines, or performance issues not tied to physical damage.
• Misrepresentation or inaccurate statements: Incorrect information that causes a client to make a costly decision.
• Breach of contract: Unintentional failure to meet contractual obligations.
• Legal defense and settlements: Attorney fees, judgments, and settlement costs related to covered claims.

Traditional E&O focuses on human error in professional judgment or advice. It doesn’t typically address risks tied to software, code, or digital systems.

That’s where Technology E&O expands the scope. Tech E&O includes all of the protections of standard E&O but adds coverage for technology-specific risks, such as:

• Failures in code, system integrations, or APIs
• Software bugs or downtime causing financial loss
• Data handling or processing errors
• Third-party data breaches stemming from your technology

By combining the professional liability protections of traditional E&O with the unique exposures of technology products and services, Tech E&O offers a more complete fit for companies that build, manage, or deliver digital solutions.

What Tech E&O Doesn’t Cover

Tech E&O is designed for financial losses arising from professional mistakes. It doesn’t replace other types of coverage your company may need. Common exclusions include:

• Bodily injury or property damage (covered by General Liability)
• Intentional wrongdoing or fraud
• Criminal acts or regulatory fines
• Employment-related claims, such as discrimination or wrongful termination (covered by Employment Practices Liability)
• Cyber incidents affecting your own systems, such as ransomware or internal data breaches (covered by Cyber insurance)

How Tech E&O and Cyber Coverage Work Together

Together, Tech E&O and Cyber insurance provide comprehensive protection. Although often bundled, these two policies serve different purposes.

Having both ensures your company is protected on both sides of a potential incident. Learn how much Tech E&O insurance you need.

Modern technology businesses face intertwined risks across software, data, and service delivery. One gap can trigger multiple claims. Having comprehensive Tech E&O coverage means your insurer can respond quickly, fund your defense, and help manage reputational impact while your team focuses on restoring service.

Broad, clearly defined coverage supports client confidence and contractual compliance — both of which are essential for growth.

Frequently Asked Questions

What types of claims does Tech E&O cover?

Claims that your company’s product, service, or advice caused a client financial loss. Coverage includes defense costs, settlements, and judgments.

Does Tech E&O include Cyber coverage?

Some policies include third-party cyber liability, but separate Cyber coverage protects your own systems. Many companies bundle both for full protection.

Does Tech E&O cover contract disputes?

If the dispute alleges a performance failure or professional error, it may be covered. Pure payment or fee disputes are typically excluded.

What if a client sues but the claim is false?

Tech E&O covers defense costs even if the lawsuit has no merit. Legal expenses can be significant even when you’re not at fault.

How often should I review my coverage?

Annually, or whenever your company adds new products, signs larger clients, or expands into regulated sectors. Coverage should evolve as your risk profile changes.

Vouch Specialty Insurance Services, LLC (CA License #6004944) is a licensed insurance producer in states where it conducts business. A complete list of state licenses is available at vouch.us/legal/licenses. Insurance products are underwritten by various insurance carriers, not by Vouch. This material is for informational purposes only and does not create a binding contract or alter policy terms. Coverage availability, terms, and conditions vary by state and are subject to underwriting review and approval.