How Much Technology Errors and Omissions Insurance Costs

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Technology errors and omissions insurance costs can vary greatly depending on a multitude of factors. Find out what influences the premium rates.

Even with stringent policies and training in place, company mistakes are bound to happen. Some of these may be egregious enough to warrant a lawsuit from a client. This is why there’s insurance for businesses faced with malpractice civil suits. With respect to technology errors and omissions insurance costs, how much can you expect to pay for this potentially business-saving coverage?

What is technology errors and omissions (E&O) insurance?

E&O insurance is essentially insurance for malpractice. Businesses across all industries, such as law, accounting, and hospitality, utilize E&O insurance. This ranges from Fortune 500 enterprises to small-to-medium-sized businesses. In today’s age where remote work is becoming the norm, technology and SaaS companies are also increasingly relying on E&O insurance.

What does E&O insurance cover?

  • Missed deadlines: This includes clients that incurred losses due to your company not delivering services by the agreed-upon deadline.
  • Undelivered services: This encompasses services that were not delivered or didn’t meet the promised quality assurance.
  • Negligence: An example of this is a cyber-security agency failing to intercept a malware attack that leads to a disruption in the client’s business.

Why do you need technology errors and omissions insurance?

Let’s say you own a web design service. An e-commerce client enlists your service with a written agreement that the website will be up and running by the peak holiday shopping season. Due to unforeseen circumstances, you’re unable to get the site up by the contractual deadline. As a result, the client loses out on potentially thousands of dollars in holiday sales. This leaves your business ripe for a lawsuit.

All it takes is a single successful lawsuit to drive a small company out of business and into bankruptcy. For larger corporations, it could lead to a massive budget loss, resulting in layoffs, reduced hours, and other cutbacks.

E&O insurance covers your legal costs, settlements, and payoffs to plaintiffs.

Cost by industry

E&O insurance costs vary by industry. Some industries are deemed a higher risk than others and incur higher premiums. Here’s a cost breakdown by sector.

  • IT: SaaS and data companies pay an average of $730 per year for a policy covering both professional and cyber liability.
  • Finance and accounting: This is a relatively low-risk niche. Companies pay about $400 in annual fees.
  • Construction and architecture: This is a higher-risk industry due to buildings not being built to code or with incorrect specifications. The insurance cost is $1,705 per year.
  • Real estate: Realty agencies pay around $665 annually. Client lawsuits stem from breaches in contract clauses or failure to disclose property deficiencies.

Technology errors and omissions insurance cost factors

Policy rates can vary significantly depending on a combination of multiple factors. Consider the following:


Successful businesses with a higher revenue may be subject to higher coverage rates. Clients are more likely to seek a high monetary claim against larger companies since they have the revenue to pay higher settlements.

Onboarding and training

Insurers may lower rates for companies that have an established and organized training program in place. This includes mandatory refresher courses. Well-trained employees are less likely to make a critical error that can lead to a lawsuit.

Business size

The more employees and clients you have, the greater your risk of a lawsuit. Depending on your industry, you may pay a per-employee rate. For example, you may pay $400 per year for every employee on your roster.


Does your company draft a lengthy contract per client project? Business lawsuits largely come down to the conditions outlined in the contract. Having a detailed contract template may lower your monthly/annual rates. Insurers may request that you revise your contracts to cover certain provisions.

Claims history

Insurers will consider you a high-risk company if your company has a history of lawsuits. It’s the same reason auto insurance agencies charge more for drivers with a history of at-fault collisions or traffic violations.


The location usually doesn’t pertain to tech companies, which tend to serve a global community with remote products like cloud, software, or data warehousing services. However, for other industries, rates are often higher in metropolitan areas with dense populations. 

How much E&O insurance do I need?

It’s up to you how much coverage you want—it depends on the average settlement amount and legal costs for your given industry. In the tech sector, small-to-medium-sized companies usually aim for $25,000 to $50,000 of coverage. For larger corporations, policies covering up to $1,000,000 per policy term aren’t uncommon.

Get E&O coverage without the hassle

Tech companies serve a diverse demographic. Each one requires coverage unique to its business model. There’s no such thing as a one-size-fits-all policy. That’s why Worth is dedicated to connecting tech agencies with a compatible E&O provider. Get a free quote today and view your rates.

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