Cyber & Tech E&O · Tech E&O
Tech E&O insurance: what it covers, who needs it and what it costs
Tech E&O insurance (technology errors and omissions) pays to defend and settle claims that your software, platform or technology service failed, had a defect or was not delivered as promised, and that the failure cost a client money. Venture-backed startups pay a median of about $3,700 a year, and most pay between $1,300 and $12,400 (Vouch, 2026).
Reza Azar · Senior Insurance Broker · OnePark Risk
Last updated October 19, 2026
The short answer (as of October 2026)
- What it is: professional liability insurance for companies that sell software, platforms or technology services. It pays defense costs and damages when a client says your product or service failed, had a defect or was not delivered as promised, and that the failure cost them money.
- Who needs it: any company whose customers rely on its software or technology services to run their business: SaaS platforms, developer tools and APIs, IT services and MSPs, AI products, fintech and healthtech platforms, and agencies that build software.
- What it costs: a median of about $3,700 a year for venture-backed startups, with most paying between $1,300 and $12,400 (Vouch, 2026). Revenue, contract size, limits and claims history decide where you land.
- Why it is usually combined with cyber: one incident often triggers both. An outage caused by a breach is a product failure to your customers and a security failure to you, so most technology companies buy the two coverages on one combined policy.
What is Tech E&O insurance?
Tech E&O insurance, also called technology professional liability, is the coverage that pays to defend and settle claims that your software, platform or technology service failed, caused a client a financial loss, or did not perform as promised. It is written for companies whose product is the promise that their technology works.
The trigger is an allegation that you were negligent, made an error or omission, failed to perform or breached a professional duty, and that a client lost money. The policy responds to:
- 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 do not meet contractual specifications.
- Negligence in technology services: claims that your consulting, integration, hosting or managed services fell below professional standards.
- Missed SLAs and downtime: service-level commitments you fall short of, where the contract attaches financial consequences.
- Certain contractual liability: breach-of-warranty and breach-of-contract claims tied to your technology's performance.
- Media and IP-adjacent claims: many forms include copyright infringement in content and similar exposures; patent infringement is almost always excluded.
The policy pays defense costs, typically the largest expense even for claims that never reach trial, plus settlements and judgments up to your limits.
How Tech E&O differs from generic E&O
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.
Tech E&O vs cyber liability
The two policies answer different questions about who was harmed. Tech E&O responds when your client suffers a financial loss because your product or service failed. Cyber responds when you are the one harmed: your data was breached, your systems were held to ransom or funds were stolen, plus the privacy claims others bring against you afterward.
Most technology companies buy them on one combined form because real incidents do not respect the boundary: a ransomware attack that takes your platform offline is a cyber claim for your own recovery costs and an E&O claim for the customers whose businesses stalled. One form means one retention, one claims process and no argument between insurers about which policy responds. Our comparison of Tech E&O vs cyber insurance draws the line claim by claim.
Who needs Tech E&O insurance?
Any company whose customers rely on its software or technology services to run their business needs Tech E&O: SaaS platforms, developer tools and APIs, IT services firms and MSPs, AI companies, fintech and healthtech platforms, and agencies that build software for clients. In practice the first enterprise contract that names the coverage makes it mandatory.
| Business type | Typical claim trigger |
|---|---|
| SaaS platforms | An outage, data loss or a miscalculation that costs a customer money |
| Developer tools and APIs | A breaking change, a failed integration or an outage that halts a customer's own product |
| IT services and MSPs | A migration, patch or configuration change that takes a client's systems down |
| AI companies | Model errors, hallucinated outputs or automated decisions that harm a customer's business |
| Fintech and healthtech platforms | A processing error or a wrong output inside a regulated, high-stakes workflow |
| Agencies and development shops | Missed milestones, deliverables that fail acceptance criteria, scope disputes |
Every row is the same promise: your technology works. See our guides to Tech E&O for healthtech companies and Tech E&O for AI companies for the underwriting questions those sectors face.
Tech E&O and the enterprise sales process
For most founders, the forcing function isn't fear of lawsuits — it's a procurement team. Enterprise buyers vet vendors on two parallel tracks. First, security and compliance: questionnaires, penetration test results, and SOC 2 audits. Second, contractual risk transfer: the MSA's insurance clause, which almost always requires technology E&O insurance — commonly $1M–$5M per claim — plus cyber liability, with your customer named where required and a certificate of insurance delivered before signature.
The practical takeaway: get your policy in place before the deal that requires it. Binding coverage mid-negotiation under deadline pressure produces the wrong limits or a mismatched form. A specialist broker can usually turn around an E&O quote in days for an early-stage company, and align limits, retroactive dates, and additional-insured language with what your contracts actually demand.
What Tech E&O covers and what it excludes
Tech E&O covers claims that your technology services or software were negligent, defective, late or short of the service levels you promised, and it pays the defense costs those claims generate. It excludes bodily injury and property damage, your own breach-response costs, intentional acts, guarantees you took on by contract beyond the law, and claims you already knew about.
Typically covered
- Errors, omissions and negligence in your services: a coding mistake, a faulty integration or a missed configuration step that leads to a client loss.
- Software defects and failure to perform: a client alleges your platform did not do what the contract promised and can quantify the harm.
- Missed SLAs and uptime commitments: service-level shortfalls where the contract attaches financial consequences.
- Defense costs: legal defense from the first demand letter, even when the claim has no merit, plus settlements and judgments within the limit.
Typically excluded
| Exclusion | Where the risk belongs instead |
|---|---|
| Bodily injury and property damage | General liability |
| Your own first-party breach costs: forensics, notification, ransomware, restoration | Cyber insurance, usually the companion form on the same policy |
| Intentional, dishonest or criminal acts | Not insurable |
| Contractual guarantees beyond what the law would impose, such as uncapped indemnities | Negotiate the contract; some forms carve back technology contract obligations |
| Claims and circumstances known before the policy began | Disclose them on the application; prior-acts coverage governs the rest |
| Patent infringement and trade-secret misappropriation on most forms | Specialty IP coverage |
Read the definition of professional services and the contractual liability clause together; if either is narrower than what your MSAs promise, the policy will not respond the way your customer expects.
Claims-made basics
Tech E&O is written on a claims-made basis: the policy in force when the claim is made responds, not the policy in force when the work was done. Three dates matter. The retroactive date sets the earliest work the policy will cover; keep it at your first policy's inception when you switch carriers. Prior-acts coverage picks up work performed before the current policy began but after the retroactive date. Tail coverage, an extended reporting period, lets you report claims after the policy ends, which matters when you wind down, sell the company or change carriers.
What Tech E&O costs in 2026
Venture-backed startups pay a median of about $3,700 a year for Tech E&O, and most pay between $1,300 and $12,400 (Vouch, 2026). Standalone E&O across all professions runs a median of about $88 a month (Insureon, 2025), but technology companies buy higher limits and answer enterprise contract requirements that push premiums above that line.
Payments, healthcare and other high-stakes use cases price toward the top of the range; a lean B2B tool with strong contracts and a clean claims history prices toward the bottom. For the full breakdown, including how the combined E&O and cyber form is priced, read our E&O insurance cost guide and the comparison of cyber vs Tech E&O cost.
What drives the premium
- Revenue: the base rating factor on most forms.
- Contract size and customer concentration: a few large enterprise contracts mean a few large potential claimants.
- Criticality of your product to clients' operations: software that runs a client's billing, trading or clinical workflow carries more severity than a reporting tool.
- Limits and retention: higher limits cost more; a higher retention brings the premium down.
- Claims history: open or paid claims, and circumstances you have reported.
- Contract terms: limitation-of-liability caps, warranty language and indemnities.
- Security controls: MFA, endpoint detection, backups and a SOC 2 or ISO 27001 report.
How much Tech E&O do you need?
Read the limit from your largest customer contract and buy at least that much. $1M–$2M is common in enterprise contracts for early-stage companies, and $1M–$5M appears in enterprise MSAs. Limits step up with revenue and with the share of your customers that are enterprises, because the size of a claim tracks the size of the contract behind it.
Four checks before you choose a limit:
- Contracts. Take the highest Tech E&O limit named in any clause you have signed or expect to sign this year; our guide to insurance requirements in enterprise contracts explains how to read the clause.
- Contract value. Estimate what your largest customer could claim if your product failed for a week: lost revenue, service credits and the cost of a workaround.
- Customer mix. Enterprise and regulated customers ask for more, and they ask for it in writing; see the SaaS Tech E&O guide for how contract limits scale.
- Retention. Pick a retention you could pay from cash the week a claim arrives.
Buy the limit the contract names, before signature, and step up when the next contract asks for more.
How OnePark Risk places Tech E&O
OnePark Risk reads your MSAs, builds one submission covering Tech E&O and cyber, and markets it across more than 100 major insurance carriers and excess lines carriers throughout the country. Before you bind, we negotiate the wording: contractual liability carve-backs, the definition of professional services and AI services language. Standard certificates issue the same day once coverage is bound.
- Review your MSAs and requirements. We read the insurance clauses, liability caps and indemnities in your customer contracts, so the submission asks for what they require.
- Build one submission. Tech E&O and cyber go to market together on one application, with one retention and one claims process.
- Market it broadly. We come back with limits, retentions and wording, not a single premium; our guide to the best E&O insurance companies for tech explains how we compare markets.
- Negotiate the wording. Contractual liability carve-backs, a definition of professional services that matches what you sell, and AI services language where your product generates output.
- Issue certificates. Once the policy is bound, standard certificate requests issue the same day.
For SOC 2 or ISO 27001 companies validated through Agency, OnePark Risk's controls-qualified Cyber and Tech E&O program through Tokio Marine Kiln at Lloyd's of London has an illustrative price anchor of approximately $2,500 per year for $1M of combined Cyber + Tech E&O coverage for eligible companies with SOC 2 or ISO 27001 validation. This figure is illustrative only and is not a quote or an offer of coverage; actual pricing requires underwriting and carrier approval, and coverage is subject to carrier availability, eligibility, terms, and conditions.
Ready to place Tech E&O? Send us the contract that requires it. We come back with markets, limits and wording, not a single quote.
Request a Coverage Review · Speak With an Advisor
Licensed in New York, California, Delaware, Massachusetts, Pennsylvania, New Jersey, Nevada, Florida, and Virginia.
Related coverages
Tech E&O is one policy in a technology company's program. Cyber covers your own breach costs and privacy claims, D&O protects founders and directors in investor and regulatory disputes, and the SaaS program guide shows how the policies fit together. Where you are incorporated and sell also changes the questions underwriters ask, so the regional guides follow.
- Cyber insurance for startups: Your own breach costs and the privacy claims that follow.
- SaaS insurance: The full program for a software business.
- D&O insurance for startups: When investors require it and what it costs.
- AI insurance: Coverage for companies building with AI.
- Tech E&O insurance in New York: NYC contract limit requirements for SaaS and IT companies.
- Tech E&O insurance in San Francisco: Customer contracts and outputs for SaaS, AI and marketplaces.
- Tech E&O insurance in Boston: Software, life-sciences and university-spinout companies.
- Tech E&O insurance in Delaware: The incorporation-vs-headquarters nuance.
- Tech E&O insurance in Florida: Contract limits and Miami and Tampa exposures.
Frequently asked questions
What is tech E&O insurance?
Tech E&O (technology errors and omissions) is professional liability insurance for companies that sell software, platforms or technology services. It pays defense costs and damages when a client says your product or service failed, had a defect or wasn't delivered as promised, and that failure cost them money.
How much does tech E&O insurance cost?
Venture-backed startups pay a median of about $3,700 a year for Tech E&O, and most pay between $1,300 and $12,400 (Vouch, 2026). Your price depends on revenue, the contracts you sign, the limits you buy, your claims history and your security controls.
Is tech E&O the same as cyber insurance?
No. Tech E&O covers your clients' financial losses when your product or service fails. Cyber covers your own breach costs and third-party privacy claims. Most technology companies buy both on a single combined policy, because one incident often triggers both.
Is tech E&O the same as professional E&O?
Tech E&O is a form of professional liability written for technology risks: software failure, missed SLAs, system outages and IP-adjacent claims. A generic professional E&O policy may not define your services broadly enough to cover the software you ship.
Who needs tech E&O insurance?
Any company whose customers rely on its software or tech services to run their business. That includes SaaS, APIs and developer tools, IT services and MSPs, and AI products. In practice, the first enterprise MSA that asks for it usually makes it mandatory.
How much tech E&O coverage do I need?
Start with the limit in your largest customer contract. Enterprise agreements commonly ask for $1M–$2M, and MSAs often require $1M–$5M. Limits usually grow with revenue and enterprise deal size.
Your AI assistant can request this coverage
An AI agent or assistant acting for your business can request this coverage from OnePark: it uses the same browser forms a person does, and no MCP server, API key, or integration is required. The agent cannot bind coverage, and submitting a request does not guarantee carrier approval or a quote. Your business’s authorized representative approves any purchase in writing.
Business insurance for AI agents · Your AI assistant can now request business insurance from OnePark · How it works for agent builders
Sources
This material is general educational information, not legal, tax, or insurance advice. Coverage availability, policy terms, and regulatory requirements vary by state, carrier, and applicant.