Frequently asked questions about errors and omissions insurance

Errors and omissions insurance (also known as professional liability insurance) protects your business against lawsuits over mistakes, missed deadlines, or other complaints about the quality of your work. It protects your business from financial blowback if a dissatisfied client sues you over something like a bug in your software or a technical problem in your hardware.

Tech professionals who offer expert advice or services purchase this policy to guard against client lawsuits. In fact, clients may require that you carry this policy before they agree to hire you.

Errors and omissions insurance covers the full cost of lawsuits over professional mistakes and breaches of contract. This coverage includes the cost of hiring a lawyer, bringing in expert witnesses, court costs, and settlements or judgments.

Even a simple or meritless lawsuit can cost your small business upward of $100,000. The protection afforded by errors and omissions insurance is incredibly valuable. Learn more about what errors and omissions insurance does and doesn’t cover.

Errors and omissions policies traditionally don’t cover cyber liability lawsuits. But insurance providers recognize that data breaches are a major professional risk for the tech industry. That's why they usually bundle errors and omissions insurance with cyber liability insurance for tech businesses.

This bundle is called technology errors and omissions insurance, or tech E&O. It typically includes both first-party cyber liability insurance and third-party cyber liability insurance, which cover different types of data breaches.

Learn more about tech E&O insurance.

Independent contractors face many of the same risks as small businesses. For example, a client could sue an IT consultant for advice that caused their business financial harm. E&O coverage can help independent contactors pay for a lawsuit related to a mistake or oversight. Clients might also require you to carry this coverage.

E&O insurance isn't usually required by law for tech professionals. However, it's strongly recommended for anyone who provides advice or a professional service, as the cost of a lawsuit could be devastating.

Read more about errors and omissions insurance for independent contractors.

Yes. Even if your business wasn't at fault, you could be sued by a client who believes you made a mistake. Errors and omissions insurance covers legal expenses and settlements for frivolous lawsuits, even ones that never make it to court.

It depends. Your errors and omissions policy will cover liabilities specific to your business, making your price unique.

To calculate an insurance premium, your insurance provider will consider your level of risk and claims history. The deductible, policy limit, and type of coverage you select will also affect your rate. Learn more about the cost of errors and omissions insurance.

With TechInsurance, you can compare quotes from top-rated insurance providers. This offers you an easy way to save money on E&O insurance.

Beyond comparison shopping, you can also save money on insurance by:

• Choosing low policy limits
• Choosing a high deductible
• Managing cyber risks to avoid claims
• Communicating with your clients

Learn more ways to save money on business insurance.

TechInsurance specializes in small business insurance for the technology industry, including businesses in a wide range of sectors. Learn more about the types of tech businesses we work with.

As a claims-made policy, errors and omissions insurance covers a claim only if the incident and resulting lawsuit happen while the policy is active. That's why most new businesses purchase an errors and omissions policy early on and maintain the policy for the life of their business.

Maintaining uninterrupted coverage ensures you're protected if long stretches pass between the incident and the resulting lawsuit. Some states have lenient statutes of limitations for these types of suits.

If your business might be exposed to risk now or in the past because you’ve let a prior policy lapse, bring it up with your insurance agent. Options to extend your protection may be available.

It takes just a few minutes to complete our online errors and omissions insurance application. In most cases, we’ll show you quotes as soon as you finish the application.

Once you purchase a policy, we’ll email you an E&O certificate of insurance. The certificate of insurance is the formal proof of insurance you need to show when you apply for professional licenses or sign certain contracts.

Our errors and omissions insurance application requires basic information about your business, such as its location, number of employees, and estimated revenue. When you finish the application, you'll receive quotes from our network of top-rated insurance companies.

From there, you can look them over and pick the one that works best for you. If you need help, one of our licensed insurance agents is happy to assist you.

If you require proof of errors and omissions insurance, it’s easy to obtain a certificate of insurance through TechInsurance. Simply log in to your account to download your certificate of insurance or request your certificate of insurance by email.

To make an errors and omissions insurance claim, contact your insurance provider directly. They will ask for:

• A description of the incident
• Basic information about your business
• Your policy number

Your insurance agent can help guide you through the process and answer any additional questions.

To change the coverage limit of your errors and omissions insurance policy, simply contact your TechInsurance agent at any time to see all your options.

Your agent can adjust the policy limit to give you more or less coverage. We can also help if you need to purchase other insurance policies for your business.

If you cancel your errors and omissions insurance policy before it expires, you run the risk of paying more for the same policy later. Insurance companies typically charge higher rates to businesses that cancel policies.

Because errors and omissions is a claims-made policy, it provides coverage only if the incident takes place and the lawsuit is filed while the policy is active. In some cases, years can pass before a client decides to sue over an incident. Keeping your policy active ensures you’re protected against clients who sue at a later date.

Read more about what you should consider before canceling a policy.

Errors and omissions insurance and professional liability insurance are two names for the same policy. Different industries tend to use different terms for this policy. It’s also called malpractice insurance in the medical industry.

Read more about errors and omissions insurance vs. professional liability insurance.

General liability insurance offers protection if a non-employee sues your business over physical injury, property damage, or advertising injury. Errors and omissions insurance compensates your business if a client sues over a professional mistake.

Read more about the differences between general liability and errors and omissions insurance.