What it is
Tech E&O covers claims that your technology product or service caused a customer financial loss: a bug, an outage, a failed implementation, or a missed specification. It is usually blended with cyber liability in one policy for software companies, and it is where most AI product liability wording now lives.
What it covers
- Customer claims for financial loss from product errors or outages
- Failed implementation and professional service claims
- Media and intellectual property claims in many blended forms
- AI related claims where the form affirmatively includes them (check the endorsement, do not assume)
- Defence costs, which are often the largest part of a claim
What it does not cover
- Your own first party costs from a breach (that is the cyber side of the form)
- Patent claims, which are often excluded or sublimited
- Contractual penalties beyond what the form allows
- Known defects you did not disclose on the application
What triggers buying it
- Signing your first enterprise customer contract
- A customer MSA that requires E&O limits
- Shipping an AI feature customers rely on for decisions
- A failed implementation or a disputed renewal
Who requires it
Enterprise customers require Tech E&O limits in their MSAs and vendor security reviews, and they check certificates at onboarding and renewal.
Typical limits
Early stage companies commonly carry $1M to $3M. Enterprise contracts frequently require $3M to $5M, and AI products are starting to attract specific questions about limits and endorsements.
Frequently asked questions
Is Tech E&O the same as cyber insurance?
They are usually blended in one policy for tech companies, but they cover different things. E&O is liability to your customers for your product. Cyber covers breach response and network security liability.
Does Tech E&O cover our AI model being wrong?
Only if the form says so. Some carriers now affirm AI in their wording, some add a named endorsement, and some are silent. Silent wording is a negotiation, not a guarantee, so we check the actual form before placement.
What limit should we carry?
Start from your largest customer contract requirement, then test it against your realistic worst case outage or error. We benchmark both before binding.
Talk through your stack before you sign the next contract
Send us the term sheet, the customer MSA, or the renewal you are worried about. We will tell you plainly what it requires, what your current programme does about it, and what we would place differently.