Technology E&O (Tech E&O)
Technology errors and omissions (Tech E&O) insurance covers technology companies against third-party claims that their software, platform, hardware or services failed or did not perform as promised, causing a customer financial loss, including defense costs and covered settlements.
Last updated October 13, 2026
How Tech E&O works
IRMI describes Tech E&O as specialized coverage for technology service and product providers, such as data storage companies, website designers and manufacturers of software and hardware. Lockton describes it as protection against third-party claims alleging failures in technology products or services. Common allegations include a bug, outage, integration failure, missed deliverable or product that did not meet promised functionality or uptime.
Most Tech E&O policies are written on a claims-made basis. That generally means claims must be reported as soon as practicable and before the policy period ends, and work performed before the retroactive date may not be covered. Insurers commonly require consent before a claim is settled. It is a form of professional liability tailored to technology. Our Tech E&O coverage page gives general background.
Tech E&O vs. related coverages
- Tech E&O vs. general E&O. Errors and omissions insurance is the broader category for professional service failures. Tech E&O is tailored to companies that sell software, platforms, hardware or technology services, and its definitions are built around those offerings.
- Tech E&O vs. general liability. Commercial general liability generally addresses bodily injury and property damage. A customer's pure financial loss from a software failure typically falls to E&O. See general liability.
- Tech E&O vs. product liability. If a hardware product injures someone or damages property, product liability is typically the relevant coverage, not Tech E&O. See product liability.
- Tech E&O vs. AI liability coverage. Some insurers offer AI liability forms or endorsements. Whether a Tech E&O policy addresses model-driven errors depends on its definitions and exclusions.
Example
A company sells workflow software to a logistics customer. A faulty update causes the platform to be unavailable for two days. The customer claims lost business and says the company breached its service commitments. The company notifies its Tech E&O insurer. Depending on the policy wording, the insurer may fund the defense and any covered settlement, after the retention.
A second example
A hypothetical analytics provider adds an AI feature that summarizes data for customers. A customer relies on an incorrect summary for a business decision and claims the provider breached its contract and was negligent. The provider's contract has a limitation of liability clause. The insurer reviews whether the product falls within the policy's definition of technology services and whether any exclusion applies, and may reserve rights while it investigates. The outcome turns on the wording and the facts.
Tech E&O versus cyber
The two are related but separate. Lockton explains that Tech E&O addresses liability from deficient services or products, while cyber addresses costs such as ransom, system restoration, business interruption and privacy violations. Many insurers offer them together, and some forms blend the two, so read what each part covers. See cyber liability insurance and our Cyber / Tech E&O page.
What to watch for
- Match the wording to what you sell. Coverage scope varies by insurer, so check that your actual products and services are described.
- Contract terms. Warranties, guarantees and liability caps in customer contracts can interact with what the policy covers.
- Exclusions. Typical exclusions include bodily injury and property damage, intentional or dishonest acts, and prior known claims. Others, such as intellectual property or specific contractual liabilities, depend on the form.
- Customer requirements. Enterprise customers often require Tech E&O limits in their contracts.
Questions to ask your broker or underwriter
- Does the definition of technology services or products match everything we sell, including SaaS, hosting, consulting, hardware, APIs and AI features?
- How does the policy treat liability we assume by contract, such as warranties, service credits and indemnities?
- Do defense costs erode the limit?
- Is there a consent to settle or hammer clause, and how does it work?
- Is the retroactive date preserved on renewal so earlier work stays covered?
- What does the customer contract require, and can we show it with a certificate of insurance?
Common mistakes
- Assuming a general liability policy covers software failures.
- Buying a policy whose definitions leave out part of the business, such as a new AI product line.
- Agreeing to unlimited liability in customer contracts without checking the policy.
- Letting the policy lapse and losing the retroactive date.
Why it matters for technology, AI, fintech and digital-asset companies
Software, AI and fintech platforms are often bought under contracts that specify insurance. Companies that add AI features should review how the policy addresses model-driven errors, and may also look at AI liability coverage, since wording varies.
Fintech and digital-asset platforms are also technology providers, and users may bring claims over outages, calculation errors or failed transactions. Ask how the policy treats losses involving customer funds or digital assets, since those are sometimes limited or addressed in separate coverage. For background see our pages on AI and emerging tech and fintech, and claims-made coverage generally.
See how this applies in practice: tech E&O and cyber insurance and errors and omissions (E&O) insurance.
Related terms
Related coverage
Frequently asked questions
What is technology E&O (Tech E&O) insurance?
Technology errors and omissions (Tech E&O) insurance covers technology companies against third-party claims that their software, platform, hardware or services failed or did not perform as promised, causing a customer financial loss, including defense costs and covered settlements. Coverage terms vary widely between insurers.
What does Tech E&O insurance cover?
Tech E&O generally covers defense costs and covered damages when a customer alleges your technology product or service failed, contained errors or did not perform as promised and caused a financial loss. Exact coverage, exclusions and definitions vary by insurer, so the policy wording controls.
What is the difference between Tech E&O and cyber insurance?
Tech E&O responds to third-party claims that your product or service was deficient. Cyber insurance generally responds to security and privacy events such as data breaches, ransomware and related response costs. Many insurers package them, but the coverage grants and limits can differ.
Is Tech E&O claims-made?
Almost always. Policies typically require that a claim be made and reported during the policy period, and that the underlying work occurred after the retroactive date. Keeping coverage continuous and buying an extended reporting period when a policy ends are important considerations.
Who needs Tech E&O insurance?
Companies that sell software, SaaS, IT services, hardware, data or AI products, and fintech platforms often carry it, particularly when customer contracts require it. Any business whose product failure could cause a client a financial loss should consider it.
Does Tech E&O cover data breaches?
Typically not the company's own breach response costs, which fall under cyber coverage. Some forms include liability for security failures or are packaged with cyber, so read what each part covers.
What is not covered by Tech E&O?
Common exclusions include bodily injury and property damage, intentional or dishonest acts and known prior claims. Others, such as intellectual property or some contractual liabilities, depend on the form.
How much Tech E&O coverage do I need?
It depends on the size of your customers, the potential cost of a failure and what your contracts require. Enterprise customers often set minimum limits, so review them alongside your retention and budget.
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