Technology E&O insurance
Can help technology businesses respond to covered claims that their products or services caused a customer financial loss.
How the coverage can help
Your work. A customer’s loss.
The incident
A failed release
A broken integration stops customer orders and leads to a claim.
Potential policy response
Legal defense
The cost of defending a covered claim about your technology work.
Covered damages
Payments for a customer’s covered financial loss from your work.
Coverage is subject to the policy’s terms. Refunds, service credits and contractual promises are not automatically insured.
The fit
Who it’s for
Software companies, IT service providers, developers and technology consultants should evaluate claims arising from their work. A service failure can create a customer loss even without a data breach. Describe your actual products and services when reviewing policy scope.
The protection
What it can cover
- Claims about mistakes in your work.
- This is coverage for customer allegations that a mistake or missed step in your technology work caused financial loss. For example, a broken integration could stop a customer’s orders. The products and services described in the policy determine which work is included.
- Claims that your product failed.
- A customer can make a claim because your software failed to do its job, even without a security breach. That is the tech E&O question. Ordinary refunds and service credits are not automatically covered.
- The cost of defending a claim.
- A covered claim can generate legal bills before anyone agrees who was at fault. Tech E&O addresses defense and covered settlements or judgments. When defense costs sit inside the limit, those bills reduce what remains to pay damages.
Follow a claim
From the incident to the insurance.
Scenario 01
A release breaks a customer’s workflow.
What happened
A software release breaks your customer’s order integration. Orders stop flowing through their system.
What the business faces
The customer says the outage cost them sales. They demand compensation for the revenue they say they lost.
Where this policy may help
Tech E&O may cover defense and customer damages. Refunds and service credits are not automatically insured.
Scenario 02
An error creates costly rework.
What happened
Your service generates incorrect reports for a customer. They rely on those reports to make business decisions.
What the business faces
The customer discovers the error and claims it cost them money. Your team must respond to a demand for payment.
Where this policy may help
Tech E&O may cover defense and financial damages. The claim must fall within coverage for your technology work.
Illustrative scenarios. Whether a policy responds depends on the claim, policy terms, limits and exclusions.
Know the difference
Different policies. Different jobs.
Different policies address different losses. These comparisons explain where to look; they do not mean every coverage mentioned is available through Komodo.
Technology E&O insurance
Addresses covered customer claims about mistakes in technology products or services.
Cyber
Addresses data and security incidents and can include your own response costs.
What to check For SaaS businesses, evaluate both coverages. A combined policy can address both needs, but a shared limit means one incident may use insurance available for other claims.
Technology E&O insurance
Focuses on covered financial loss claims arising from technology work.
General liability
Commonly addresses injuries to other people and physical damage to their property.
What to check A software error causing lost revenue is a tech E&O question. Physical injury or damage to another company’s equipment is a general liability question.
Technology E&O insurance
Is professional liability tailored to technology products and services.
Other professional liability
May be designed around another profession’s work and risks.
What to check For software and IT work, look for technology-specific coverage. A generic professional liability label is not enough to establish that your product or service is included.
Technology E&O insurance
May respond to a covered claim about your technology work.
A warranty or service guarantee
Is a promise you make to a customer about performance or remedies.
What to check Keep refund and SLA commitments separate from insurance assumptions. A contractual promise to repay a customer does not establish that the insurer will reimburse you.
Good questions
Before you decide
What is technology E&O?
Technology errors and omissions insurance is professional liability coverage for specified technology products or services. It may respond to claims that an error, omission or failure caused a customer financial loss.
Who needs it?
Businesses whose customers rely on their software, IT services or technology advice should review the exposure and any contract requirements. Coverage needs depend on the work performed.
What does it cover?
It may pay defense costs, settlements or judgments for covered claims involving the insured products or services. Definitions, exclusions and limits determine the scope.
What isn’t covered?
It does not pay every cost of fixing work or meeting a contract. Review exclusions and provisions for refunds, rework, contractual promises, prior claims and intellectual property.
How does it relate to cyber?
Technology E&O addresses covered claims about your products or services; cyber addresses specified data and security incidents. They may be packaged together, but definitions and shared limits still matter.
Do clients require it?
Some customer contracts require technology E&O and particular limits. Compare the contract’s requirements with the policy, rather than relying on the coverage label alone.
What does a claim look like?
Illustrative example: a software update disrupts a customer’s billing system and leads to a financial-loss claim. Technology E&O may help with covered liability and defense costs.
Is it claims-made?
Technology E&O is commonly written on a claims-made basis. Review when a claim must be made and reported, the retroactive date and any extended reporting provisions; an active policy alone does not establish coverage.