Errors and Omissions Insurance

E&O insurance, or errors and omissions insurance, applies to litigation due to the negligence of performing professional duties. In the case of IT or tech companies, E&O insurance can protect against charges that are not the company's fault, such as hardware or software failures. E&O insurance is especially good to have in an age when Internet servers fail, computer viruses run rampant, and hard drives get unexpectedly erased.

Since most contemporary companies rely on online business, the failure of a partner tech company is not tolerated – especially when these customers demand more for their money, and 99.9 percent is not good enough. In an age when clients can file massive lawsuits that can result in high payouts and ruined reputations, E&O insurance agents will defend your claim within the limits of your policy.

There is a limit to E&O insurance, and one thing it does not cover is deliberate negligence. This is why it is important for tech companies to keep excellent records, so they will not be held accountable for more than they should. Tech companies should also remember to follow the first rule of any insurance when buying an E&O policy: go over it meticulously to see what it does and does not cover.

A tech company should have its E&O insurance in place the day its site is launched. Unfortunately, most commercial liability insurances do not cover catastrophic technical cases that fall under E&O insurance work. Tech companies have enough to do without the legal and financial burden of lawsuits from companies and clients.