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Technology Liability Insurance

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Technology Liability Insurance

What Is Technology Liability Insurance?

Also known as Technology Errors and Omissions Insurance, technology liability insurance is one of the most important coverages for emerging technology companies. It covers the specific professional liability risks that technology companies frequently encounter.

Technology liability insurance provides coverage for businesses that are developing new technology, working in leading-edge industries, or are offering services or products that significantly affect the user’s ability to produce income. It covers contractual liability, professional negligence, and third-party cyber liability. While some of these liabilities may fall within other insurance policies, technology liability insurance expands coverage to account for unique scenarios that present themselves in constantly changing technology industries.

Technology Liability Insurance Quotes From Many Reputable Carriers

Everything You Need To Know About Technology Liability Insurance


Does your business need technology liability insurance?

There are many businesses that benefit from purchasing a technology liability insurance policy. Some companies that should think about adding technology liability insurance to their coverage are:

  • Software developers
  • Software resellers
  • Website designers and developers
  • IT consultants and contractors
  • System integrators
  • Hardware manufacturers
  • Electronic component manufacturers

All these industries face a quickly evolving market that has distinctive errors and omissions concerns.

How is technology liability insurance different than cyber liability insurance?

Technology liability insurance covers expenses related to product or service failures that are unique to technology companies, while cyber liability insurance covers expenses associated with a data breach or malware attack.

These two policies can make a great package for technology businesses because they are often the hardest impacted by a cyber-attack or data breach. For example, if a custom software company’s product fails and customer data is exposed leading to financial damage, a technology liability insurance policy may cover the product failure exposure, but a cyber liability insurance policy is needed to cover costs associated with the data breach.


What does technology liability insurance cover?

Technology liability insurance covers multiple errors and omissions-related incidents that can occur within a technology company. These can include:

  • Technology product or service failures
  • Contractual disagreements
  • Professional negligence
  • Third-party cyber liability
  • Media and content liability

Technology product or service failure

If your product or service does not perform as advertised and causes financial harm to a customer, they can file a technology liability claim against your company.

Contractual failure

At the start of most commercial relationships, the associated groups sign a contract that outlines features, capabilities, services, and other deliverability items. If these terms are not upheld because your company is unable to do so or there is an oversight, it may cause financial loss for the customer. If they sue, a technology liability insurance policy can help cover lawsuit expenses.

Professional negligence

The products and services your company sells have the potential to cause financial or legal issues for your customers. Software updates, incompetent service advice, hardware malfunctions, or other technology-related issues can cause problems for customers. For example, if your software releases a patch that introduces a vulnerability to a client’s database, they could sue for negligence.

Third-party cyber liability

If your technology causes or is responsible for a cybersecurity breach on a client’s system, they could file a claim against your business. In this case, a technology liability insurance policy may help cover the expenses from a lawsuit. If a data breach or cyberattack happens to your business, you will need a cyber liability insurance policy to cover those expenses.

Media and content liability

If you provide a client with digital media or content services that result in copyright infringement, a technology liability insurance policy may cover legal expenses. Depending on the situation, a general liability insurance policy may be required to cover lawsuit expenses. Discuss your specific needs with a licensed insurance agent.

What does technology liability insurance NOT cover?

As with any insurance policy, there are exclusions to what technology liability insurance will and will not cover. Other situations a technology liability insurance policy will not cover are:

Criminal activity

A business that is involved with illegal activity will not be able to find coverage for lawsuits resulting from their actions.

Slander and libel

Slander and libel are covered under different insurance policies, depending on the context. If someone who is part of your organization makes accusations against another employee, a resulting lawsuit would be covered by an employment practices liability insurance policy. If these same accusations are made against a third party, like a customer or competitor, your business would need coverage through a general liability insurance policy.

Customer property damage or injury

A business will require a general liability insurance policy to cover property damage or injuries to customers.


If a business or their clients have damages due to a cybersecurity breach, a technology liability insurance policy will not cover expenses. The company will need a cyber liability insurance policy to take help with cyber-attack expenses.

Surety bonds

Technology companies will often have to secure a surety bond when competing for large government or private sector contracts. A technology liability insurance policy cannot take the place of a legal or contractual bond requirement. Some common bonds required by technology companies are fidelity bonds, licensing & permitting bonds, and service bonds.


How much does technology liability insurance cost?

The exact price of a technology liability insurance policy can be hard to estimate without knowing your business’s exact situation. Many of the coverage’s variables depend on certain factors such as:


Each technology company faces unique errors and omissions challenges. Companies that have greater risk typically have higher insurance costs.

Number of employees & payroll

The size of your organization is a factor in determining premium prices. More employees will typically mean greater policy costs.

Past claim history

If your company has a history of technology E&O claims, it may affect policy terms and potentially lead to an increased price.

Company revenue

The greater a company’s revenue the more exposure they have to insurance claims.

Coverage amount

Higher coverage limits and different deductible options will have a large impact on policy rates.

Speak with one of our licensed insurance agents to get an accurate technology liability insurance quote >


How do I make a technology liability insurance claim?

Most carriers have online claim reporting capabilities, or you can call their toll-free claims reporting phone number. At Winooski Insurance Agency, we are available to provide information about the claim reporting process. Our clients can rest easy knowing our experienced agents are ready to help when needed.

View a list of our partner carriers and instructions on where to file a claim with each.

Why should I get technology liability insurance through an independent agency?

Winooski Insurance has been an independent insurance agency for almost 40-years. During this time, we have created long-term relationships with a multitude of insurance partners which allows us to present you with a broad range of coverage options at competitive rates. We’re committed to helping you address your unique requirements.

What Other Types Of Insurance Should Your Business Consider?

General Liability Insurance

Protect your business from common third-party injuries, damages, and risks.
Learn More

Directors & Officers Liability Insurance

Directors & officers liability insurance provides coverage for the assets of company executives
Learn More

Cyber Liability Insurance

Don't get caught off-guard when important data is lost to hackers or malware attacks.
Learn More

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