How Much Does Tech E&O Insurance Cost? (A Real-World Guide)

How Much Does Tech E&O Insurance Cost? (A Real-World Guide)

Technology Errors and Omissions insurance—commonly known as Tech E&O Insurance—is a critical form of protection for any tech business offering software, digital services, or IT consulting. It helps cover legal costs, settlements, or judgments arising from a claim that your product or service failed to perform as expected.

But how much does Tech E&O insurance actually cost?

While pricing can vary widely, understanding the key factors that drive premiums can help you plan more effectively and avoid surprises.

1. Company Revenue

Your company’s annual revenue is often the first variable insurers look at. The logic is simple: the more revenue your business generates, the more operations you likely have—and therefore, the more risk. Higher revenue often correlates with higher insurance premiums, especially for companies with large contracts or enterprise clients.

2. Industry and Type of Services Offered

Not all tech companies face the same risks. A business that develops mission-critical software (like financial systems or healthcare applications) may be seen as a higher liability than one offering basic web design. The more technical and high-stakes your service, the more likely an error or failure could result in litigation.

3. Company Size and User Base

The number of employees and clients you serve also plays a role. More employees or users means more potential points of failure, increasing your likelihood of being sued for an error or oversight. Tech startups with a lean team and limited customer base may pay significantly less than large, established firms with thousands of users.

4. Claims History

Your insurance history acts like a driving record. If you’ve had previous claims or lawsuits related to product failure or service mistakes, insurers may flag your business as a higher risk. A clean history can help you secure better rates, while past incidents might increase your premium or limit your options.

5. Coverage Limits and Deductibles

The more protection you want, the more you'll pay. Higher policy limits and lower deductibles increase the insurer’s exposure, which raises your premium. If you're seeking $1 million or more in coverage, expect to pay more than a company insuring for a lower amount.

Typical Price Range for Tech E&O Insurance

While prices vary, many small to mid-sized tech firms can expect to pay between $1,000 and $5,000 annually for a basic Tech E&O policy with $1 million in coverage. Larger companies or those in high-risk sectors may see premiums of $10,000 or more per year.

Final Thoughts: What You Can Do to Manage Costs

To keep your Tech E&O insurance costs manageable:

• Work with an agent who specializes in tech insurance
• Maintain detailed documentation and quality assurance processes
• Regularly review contracts and terms of service
• Avoid overpromising on deliverables
• Address user issues quickly and transparently

Having the right coverage not only protects your financial stability, but also builds credibility with clients, showing them that you take risk management seriously.

Need help navigating Tech E&O insurance for your business?

We specialize in helping tech companies find the right coverage for their size, services, and growth stage. Contact us today for a customized quote.