Errors and omissions insurance provides coverage when a client sues your tech company over a missed deadline, coding error, or other mistake or oversight.
If a client could sue your company over a mistake or oversight, you can benefit from errors and omissions insurance. E&O (also called professional liability insurance) offers crucial protection for IT consultants, project managers, and other IT and tech professionals who provide advice or expert services to their clients.
This policy is often bundled with cyber liability insurance in a package called tech E&O, which includes coverage for lawsuits over data breaches and cyberattacks.
When a client files a lawsuit because you missed a deadline, made a coding error, or broke the terms of a contract, E&O can help pay for:
Because legal costs can escalate, E&O insurance is crucial for tech companies where a simple mistake can result in lost profits for a client – and a lawsuit for your company.
If a software developer has an error in code that impacts a client negatively, the result could be a lawsuit.
Poor advice from an IT consultant about which programs or services to use could be devastating for a client's business.
When a project manager misses a deadline, the project could cost more than it was budgeted for. Even worse, it could fail to launch at a critical time. Mistakes made by subcontractors can also lead to lawsuits.
Web hosting companies provide a key service for e-commerce businesses and other companies whose success depends on their online presence or services. If your clients experience downtime, they could sue your web hosting company for failing to provide the services they need to operate.