Tech Errors and Omissions Insurance

Tech Errors and Omissions insurance (Tech E&O) is a form of professional liability coverage written for technology vendors. It responds to third-party claims that the vendor's software, hardware, IT services, or consulting work failed to perform as promised or caused a client to suffer financial loss. Defense costs and settlements for those claims are typically the core of the policy.

It is bought by software companies, SaaS providers, IT consultancies, managed service providers, and other technology vendors that deliver products or services to clients under contract. Many businesses require their technology vendors to carry Tech E&O at specified limits as a condition of doing business.

Tech E&O is closely related to Professional Liability insurance, which is the broader category covering the same family of risks for service-based professions. Tech E&O is essentially Professional Liability with wording tuned to technology delivery and often combined with a Cyber Liability section in a single form (often marketed as a tech package or hybrid policy).

The form was not built for generative AI third-party harm. Tech E&O covers the vendor that sold a software product, not the enterprise that deploys it. Bodily injury and property damage from AI outputs are typically outside the form. Intellectual property infringement is rarely covered. Financial-damage claims from a generative AI output can be disputed without affirmative AI wording. That gap is what newer Generative AI Liability forms are written to close.

For a business that deploys generative AI rather than sells it, the practical consequence is a coverage gap. Tech E&O answers the vendor's work product, Cyber Liability answers data-security events, and neither is written for third-party harm caused by an AI output in the deployer's own operations. The Verisk ISO general-liability endorsements CG 40 47 and CG 40 48 (with the products and completed operations form CG 35 08) make that exclusion explicit on the underlying Commercial General Liability form at 2026 renewals, and a growing number of Tech E&O carriers are adding parallel AI carve-outs at renewal. Affirmative generative AI liability insurance is the form built to close the gap: written to the deployer, on a claims-made basis, so the timing of placement and renewal sets what is recoverable.