Technology E&O · North San Diego
Technology E&O and professional liability for software developers, SaaS platforms, IT service providers, and technology consultants — coverage for the claims a general liability policy was never built to handle.
The Coverage Gap
General liability is built around physical risk — bodily injury and property damage from your premises or operations. It has nothing to do with the actual risk most technology companies face day to day: a client claiming your software, platform, or service didn't perform as promised and cost them money. That's a professional liability claim, and GL policies exclude it almost entirely.
Technology E&O responds to exactly that scenario — a software bug that corrupts a client's data, an outage that costs a customer revenue, a coding error that breaks a client's system, a missed implementation deadline that has a contractual financial consequence. Any business that delivers a service or product whose performance a client could reasonably dispute has this exposure, whether or not it's been thought through.
Contract limitation of liability clauses help, but they don't replace coverage. Clauses get challenged, carved out for gross negligence, negotiated away by larger clients with more leverage, or simply don't bind third parties outside the contract. E&O coverage responds regardless of whether the cap holds, and it covers legal defense costs from the first dollar — costs that accrue whether or not the claim ultimately succeeds.
For most technology companies, E&O and cyber liability are more efficient written together. A combined package avoids coverage gaps at the seam between the two — a breach that also becomes a client's E&O claim, for instance — and a single coordinated policy responds more cleanly than two separate carriers arguing over which one applies.
Common Questions
Technology E&O covers financial loss claims arising from your product or service failing to perform as represented — a software bug that corrupts a client's data, an outage that costs a customer revenue, a coding error that breaks a client's system. GL policies exclude these kinds of professional and financial loss claims almost entirely, since they're built for physical injury and property damage, not performance failures in a digital product or service.
Any business that provides a service, gives advice, or delivers a product whose performance a client could reasonably dispute — software developers, SaaS platforms, IT managed service providers, digital agencies, consultants, and technology integrators. If a client contract includes your work as a factor in their business outcomes, and they could plausibly claim your work caused them a financial loss, you have professional liability exposure whether or not you've thought about it that way.
The underlying concept is the same — coverage for financial loss claims arising from a professional service failing to meet the standard a client expected — but technology E&O policies are written with specific language addressing software, data, and technology service exposures that a generic professional liability policy for, say, a consulting firm wouldn't anticipate. Carriers that specialize in tech E&O understand SLAs, uptime guarantees, data handling, and software failure modes in a way generalist E&O carriers often don't.
A limitation of liability clause can cap your contractual exposure to a specific client, but it doesn't eliminate the need for coverage. Clauses get challenged, carved out for gross negligence or willful misconduct, negotiated away by larger clients, or simply don't apply to claims from third parties who aren't a party to the contract. E&O coverage responds regardless of whether the liability cap holds up, and it also covers your legal defense costs, which accrue whether or not the underlying claim succeeds.
Yes, and for most technology companies it's the more efficient approach. A combined tech E&O and cyber package avoids coverage gaps at the seam between the two — for example, a data breach that also triggers a client's claim that your service failed to protect their data as promised touches both coverage parts, and a single coordinated policy responds more cleanly than two separate policies from different carriers arguing over which one applies.
Pricing is driven primarily by revenue, the nature of your services or software, the size and sophistication of your typical client, your claims history, and the limits and deductible you select. A company doing implementation work for enterprise clients with large contract values will typically see different pricing than a small SaaS tool serving self-service customers, even at similar revenue, because the potential claim severity is different.
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