Technology Errors and Omissions Insurance
Technology E&O insurance applies when a company makes a mistake or is negligent in providing their tech service, which causes financial harm to a customer. These errors can range from missing project deadlines to recommending inappropriate technology.
Best for companies that provide:
- Technology products and services
- Software
- Data storage
- website design
It can help cover your business if clients sue you for:
- Providing a specific part that eventually fails due to a computer manufacturer
- Selling a product that isn’t compatible with their older computers, causing them to crash.
- recommending inappropriate technology
- failing to meet project deadlines.
- Errors or oversights
- Undelivered services
- Budget overruns
- Incomplete work
- Breach of contract
- Poor advice
Technology E&O insurance will pay for:
- Legal expenses
- Attorney’s fees
- Court costs
- Money paid to settle a lawsuit
- Legal judgments (what a judge or jury orders you to pay)
- Related costs, such as court and expert witness fees
Difference between Cyber and Technology E&O
| Technology E&O | Cyber Insurance |
|---|---|
| Responds to a failure of a service/product and covers their business in case of professional mistakes | Responds to a data breach or cyber incident for businesses that use technology |
Packaging Technology Errors & Omissions and Cyber
A Tech company needs both, Tech E&O and a Cyber policy. They may not be covered for certain claims if they only carry one or the other. For example, if a tech company’s software service fails, leading to exposure of third-party data, a tech E&O only policy would cover the service failure, however, the costs associated with the data breach may be excluded. Even more importantly, a stand-alone cyber liability may not cover this loss because it was caused by a service failure (not ransomware or other types of hacking). So, companies should package their tech E&O with cyber liability insurance to ensure that the policies will respond to any type of situation.