What Is Technology Errors and Omissions Insurance?
Today, most businesses run on technology. If that technology fails, it can have a big impact on their finances. And, if your business was the one that supplied that technology, they could come after you to help pay for their losses. Unfortunately, traditional liability policies usually won’t cover pure financial losses. That’s why we offer our technology errors and omissions insurance, also known as technology E&O coverage or professional liability insurance. This coverage can help cover your business’ legal fees and other related costs if:
- Software you sold to a client had glitches that caused them to lose a month’s worth of billing data.
- Equipment you installed prevented your customer from receiving online orders for 48 hours.
- Your cloud-based data services failed to backup critical data that a customer cannot recreate.
- The website you designed for a customer looked too much like its key competitor’s site.
Our Failsafe Technology Liability Product Suite addresses tech company’s errors and omissions (E&O) liability. Insuring your business with tech E&O insurance, on top of your standard policies, provides you with 360 degrees of protection. Without this coverage, expect to pay claims out of pocket.
What Is Technology Errors and Omissions Insurance
The differences between cyber liability and errors and omissions insurance may not be clear right away. Cyber liability insurance helps protect your business from cyberattacks and accidental data leaks. Let’s say you keep your customers’ personal information in a secure database and it gets hacked. If any of your customers file a claim against you, cyber liability insurance can help pay for the costs associated with these covered claims. It can also help your business prepare and recover from a cyberattack or data breach. On the other hand, technology errors and omissions insurance helps cover your business from:
- Product failures
For example, if you rush production to meet your customer’s deadline but then your product has a glitch in it, your client can file a claim against you for negligence. Technology errors and omissions insurance can help pay for this claim.
How Does Technology Errors and Omissions Insurance Work
Technology errors and omissions insurance helps protect you from damages caused by mistakes in your products or services. It can help cover your business if clients sue you for:
- Providing a specific part that eventually fails to a computer manufacturer.
- Missing important deadlines for developing a new product, causing their profits to drop.
- Selling a product that isn’t compatible with their older computers, causing them to crash.
Technology Errors and Omissions Insurance Coverage
Technology Errors and Omissions Insurance include:
- Errors & omissions (E&O) liability
- Security liability
- Data privacy and network security liability
- Personal injury liability
- Intellectual property liability
- Media liability
How Technology Errors and Omissions Insurance Works With Contracts
For complete protection, you’ll want both general liability and professional liability coverages. However, you should be aware that many E&O policies don’t cover actions that breach a contract. This is important because many technology professionals have clients sign contracts and license agreements.
Technology Errors and Omissions Insurance Cost
Insurance costs for E&O coverage can depend on your:
- Number of employees
- Coverage limits
- History of lawsuits
On average, E&O coverage costs about $500 to $1,000 per year, per employee. For a better idea of E&O insurance premiums and costs, get a quote today. You can also call (803) 386-1885 and speak with one of our advisors.
Types of Companies That Need Tech E&O Insurance
There are many types of businesses that need tech E&O insurance because of the products and services they provide. Software and information technology specialists, including:
- Packaged or custom software developers
- Website designers
- Computer consultants
- Systems integrators
- Federal government IT contractors
- Hardware and electronics manufacturers
Businesses that produce electronic components, such as:
- Consumer electronics
- Communications equipment
Providers of telecommunications and integrated communication services, like:
- Local exchange carriers
- Long distance telecom carriers
- Internet/application service providers
- Website hosting
Does your tech company’s risk management plan need errors and omissions insurance? Let’s schedule a time to talk.