The short answer
Tech E&O may address covered claims that a technology product or service caused financial loss. Definitions, exclusions, retroactive dates and reporting conditions matter, particularly for AI products or broad contractual promises. It may be combined with cyber, but compare the actual coverage parts. Premium ranges below are illustrative budgets.
Use this guide to prepare questions, not to establish coverage. Any unsourced costs, limits or timing ranges are illustrative planning examples, not quotes, verified market averages or carrier commitments.
What Tech E&O covers
| Claim | Startup example |
|---|---|
| Product failure | A bug corrupts a customer’s billing data |
| Outage | Downtime stops a customer’s operations for a day |
| Missed deliverables | An integration ships late and the customer loses a deal |
| Negligent advice | Implementation guidance causes a costly misconfiguration |
| Media and IP | Your software’s interface infringes a copyright |
Defense costs are covered, and on most Tech E&O policies they reduce the limit.
What Tech E&O usually excludes
- Bodily injury and property damage: that’s general liability
- Liability you took on only by contract, beyond your legal duty
- Patent infringement and trade secret misappropriation
- Fines, penalties and refunds of your fees
- Known claims and incidents before the retroactive date
- AI output, on some policies; see whether Tech E&O covers AI output errors
How claims-made Tech E&O works
A claims-made policy covers claims made during the policy period for work done after the retroactive date. Keep renewing without a gap and keep the retroactive date. If coverage ends, an extended reporting period, often called a tail, extends the time to report claims about past work.
Tech E&O vs. cyber
Tech E&O covers your customer’s loss when your service fails. Cyber covers breaches and attacks, including your own response costs. Most incidents involve both, which is why they’re sold together. See cyber liability for startups.
Limits, cost and how fast you can get it
Seed companies often start at $1M; enterprise contracts push to $3M to $5M. Cost is mostly rated on revenue. StartupInsurance.ai quotes primary and excess together when a contract needs more. Timelines, excess layers and sublimits are in how to build a $5M Tech E&O and cyber program. Terms are defined in the startup insurance glossary.
Get a contract check
Send us the contract that asks for Tech E&O. We provide an initial written review within one business day after receiving the necessary information, with questions and next steps. Carrier quotes, coverage decisions and policy changes may take longer. Get a free contract check.
A few more answers
Frequently asked questions
What's the difference between Tech E&O and cyber insurance?
Tech E&O covers customer losses when your product or service fails. Cyber covers breaches, attacks and data incidents, including your own response costs and third-party claims. Most B2B startups buy both together.
Is Tech E&O the same as professional liability?
Yes, it's professional liability written for technology companies. It's built around software, services and data, and usually includes media and IP coverage that general professional liability lacks.
What is an extended reporting period?
It's extra time after a claims-made policy ends to report claims about work done while it was active. Contracts often require one if you stop renewing. It's bought once, as a share of the annual premium.
Does Tech E&O cover service credits we owe a customer?
Usually not. Service credits and fee refunds are contract remedies most policies exclude. The customer's other losses from the same failure may be covered.
Does Tech E&O cover work done by our subcontractors?
It covers your liability for their work on your behalf. It doesn't cover the subcontractor itself, so require subcontractors to carry their own Tech E&O.
General information, not a coverage determination or legal advice. Unless a specific source is identified, prices and timing ranges are illustrative planning examples—not measured market averages, quotes or guarantees. Policy wording, carrier, state and your company’s operations determine what applies.