Professional liability for companies that ship software.
When a customer claims your product, model, or implementation caused them financial harm, Tech E&O pays the defense and the damages.
- The question it answers
- “What if our software fails and a customer loses money?”
- Typical limit
- $3M – $5Mat Series B
- Usually bought with
- CyberGeneral LiabilityD&O
What Tech E&O actually does
Technology Errors & Omissions — also called tech professional liability — covers financial loss a customer suffers because your technology or services failed to do what you said they would. A missed SLA, a bug that corrupted records, an integration that silently dropped transactions, a model that produced an output someone relied on. General Liability will not respond to any of that, because there is no bodily injury and no physical property damage.
It is the policy enterprise procurement is actually asking about when an MSA says 'professional liability' or 'errors and omissions.' Limits of $1M to $5M are the most common contractual asks, and the requirement usually appears alongside cyber, general liability, workers' compensation, and umbrella in the same insurance exhibit.
For AI companies, this is the coverage that has changed the most. Some carriers now attach broad exclusions for claims arising from artificial intelligence; others offer affirmative AI coverage. Two policies with the same limit and premium can behave in completely opposite ways when a model output is at the center of the claim. Reading that language is the job.
Buy it when
- An MSA or vendor agreement requires professional liability or E&O
- You signed your first enterprise customer
- You started charging for services alongside the product
- Your model or product output is being used to make consequential decisions
- You are indemnifying customers for IP claims in your standard terms
What it covers
Grants vary by carrier and form. These are the components we look for when we place it.
Negligent acts, errors, and omissions
Defense and damages when your product or professional services fail to perform as represented and a customer suffers financial loss.
Breach of contract for performance failures
Many forms extend to contractual liability arising from failure to meet stated performance obligations — a critical extension for SLA-driven businesses.
Unintentional intellectual property infringement
Copyright, trade dress, and often trademark claims arising from your product or content. Patent is typically excluded.
Contingent bodily injury and property damage
Where a software failure leads to physical harm — important for devtools embedded in operational, industrial, healthcare, or automotive contexts.
Subcontractor and vendor liability
Claims arising from work performed on your behalf by contractors and outsourced developers.
Cost of corrections
Some forms fund the expense of fixing the failure to mitigate a larger loss. This is a differentiator worth asking for by name.
Affirmative AI coverage
Where available, explicit coverage for claims arising from AI and machine learning outputs rather than silence or an exclusion.
What it doesn't cover
We put this in front of you at binding — the only moment you can still do something about it.
- Patent infringement and trade secret misappropriation
- Warranty and guarantee obligations that go beyond your standard terms
- Cost of re-performing services you were already contractually obligated to deliver
- Fraud, intentional wrongdoing, and knowing violations of law
- Bodily injury and property damage — General Liability territory, absent a contingent extension
- Prior known circumstances and pending litigation at inception
Three ways this policy earns its premium
Composite scenarios drawn from how these losses typically develop. Illustrative, not case files.
A pricing bug undercharges 4,000 end customers
A release changes rounding logic in a billing platform. The customer under-collects for six weeks and cannot claw it back from consumers. They demand $1.9M. Tech E&O defends and negotiates the resolution.
A model recommendation drives a costly business decision
A forecasting product materially misstates demand after a training data pipeline fails silently. The customer over-purchases inventory and sues for the write-down. Whether this claim is paid or denied comes down to whether the policy has an AI exclusion.
An outage triggers SLA credits and a termination claim
A 31-hour outage breaches an uptime commitment. The customer terminates, demands a refund of prepaid fees, and claims consequential damages from their own downtime. The professional liability form responds where the cyber trigger does not.
What limit is normal
Ranges we commonly see for technology companies. Your contracts and exposure decide the answer — this is where the conversation starts, not where it ends.
| Stage | Typical | |
|---|---|---|
| Pre-seed / Seed | $1M | Combined Tech E&O + Cyber. Sufficient for most early SMB and mid-market contracts. |
| Series A | $2M – $3M | Enterprise MSAs commonly specify $2M. Confirm the contract counts a shared E&O/cyber limit as compliant. |
| Series B | $3M – $5M | Contractual liability wording and IP infringement scope become the real negotiation. |
| Series C+ | $5M – $20M+ | Structured towers, per-customer requirements, and named-customer endorsements. |
Companies that need this
- SaaS and platform companies with paying customers
- AI and ML companies whose outputs inform customer decisions
- Developer tools and infrastructure companies in the critical path
- Companies doing implementation, integration, or professional services work
- Any company signing an MSA with an insurance exhibit
What we need to quote
- Description of the product, who uses it, and what decisions it drives
- Revenue by line: subscription, services, usage
- Your standard MSA or terms of service, especially limitation of liability
- Largest contract value and top customer concentration
- Whether AI/ML is used, and whether outputs are human-reviewed
- SDLC, QA, and release process summary
- Five years of loss runs and any threatened claims
Most of this is collected once in the Atlas submission and reused across the markets we approach.
Start a submissionSituations that put this policy on your desk
Tech E&O, answered
No. General Liability covers bodily injury and physical property damage. A software defect that costs a customer money is neither. Nearly every claim a software company faces falls outside GL entirely.
Almost never. Patent is excluded on standard forms. Copyright and trade dress are usually included. If patent exposure is material, that is a separate specialty market and a separate conversation.
That is a normal ask and usually solvable — either with a primary plus excess structure, or by negotiating the exhibit down to what is proportionate to the contract value. We do that negotiation with procurement regularly.
Materially. Carriers are split between silence, exclusion, and affirmative grant. We read the AI language on the quotes we present and tell you plainly which of the three you're being offered.
Find out what tech e&o costs for your company.
Tell us about the business once. A broker reviews it the same business day and comes back with a plan and a timeline.