What’s the difference between tech E&O and cyber insurance?

Protect your business from the evolving risks of technology, by understanding the difference between tech E&O and cyber insurance. Learn more.

Written by Mike McLean Published September 9, 2024

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When it comes to protecting your business from the evolving risks of technology, you may be wondering about the difference between tech E&O and cyber insurance.

Here’s a quick rundown of the difference between tech E&O and cyber insurance and how they can work together to help keep your business safe.

What Is Tech E&O?

Person holding hands up in disbelief wondering what the difference between tech E&O and cyber insurance is

Tech E&O insurance, also known as technology errors and omissions insurance, is designed to protect your business against claims related to errors or oversights in the design, development, and/or delivery of your technology products and services.

This type of coverage can help safeguard your company from costly lawsuits that could arise if a customer suffers financial losses due to an error made by your company.

What Are Some Examples of Tech E&O?

Examples of Tech E&O include design defects, failure to deliver on promises or meet deadlines, improper documentation of services rendered, and more.

To learn more about Tech E&O and how it can help protect your business, be sure to contact a trusted insurance provider today.

Common examples of Tech E&O include coverage for:

  1. Design defects and errors in software or hardware development.
  2. Failure to deliver on promised timelines or meet deadlines for tech products or services.
  3. Improper documentation of services rendered, such as providing incorrect specifications or user instructions.
  4. Tech issues that cause financial losses for customers, such as data breaches, system failures, and more.
  5. Tech bugs and glitches that impact customer usability and satisfaction with a product or service.
  6. Tech issues that result in product recalls, refunds, or other financial penalties for your business.
  7. Negligence related to the testing of new technologies before they are released to the public.
  8. Any other mistakes or oversights in the development and implementation of your tech product.

What Does Tech E&O Not Cover?

Worried man concerned about digital product breaking because he does not comprehend the difference between E&O and Cyber insurance

There are a few key types of risks that tech E&O does not cover. First, tech E&O does not cover any intentional acts committed by the insured.

This means that if you intentionally commit fraud or engage in other criminal activity, your tech E&O policy will not provide any protection.

Second, tech E&O also excludes coverage for product liability claims.

This means that if your product causes injury or damage, you will not be protected under a tech E&O policy.

Finally, tech E&O excludes professional services such as consulting, legal, or accounting services.

If you provide these types of services to your clients, you will need to purchase a separate professional liability policy to be fully protected.

Overall, tech E&O is an important coverage for businesses in the tech industry, but it’s vital to understand its limitations and exclusions to ensure that you are adequately protected.

What Is Cyber Insurance?

In contrast, cyber insurance provides protection for businesses in the event that they experience a data breach or other cyber-related incident.

It can help cover the costs associated with recovering from such an event, including legal fees, PR expenses, and compensation for customers who may have been affected.

More reading: What is a cyber liability insurance policy?

What Are Some Examples of Cyber Insurance?

Examples of cyber insurance include protection for data breaches, cyber attacks, cyber extortion, and more.

To learn more about how cyber insurance can help protect your business, be sure to contact a trusted insurance broker who can customize a policy for your company.

Some common examples of the protection cyber insurance provides your company includes:

  1. Protection against data breaches, including costs associated with recovering stolen data and notifying affected customers.
  2. Coverage for cyber attacks and other malicious online activity that could harm your business or its customers.
  3. Coverage for losses related to ransomware attacks, malware infections, phishing scams, and other cyber-related threats.
  4. Financial compensation for customers who may have been impacted by a cyber incident at your company.
  5. Legal fees and other expenses related to defending yourself against claims of negligence or liability from a cyber incident.
  6. Compensation for reputation management services after an attack on your business’ online presence or brand image.
  7. Support for forensic investigations into the cause of a cyber breach or attack.
  8. Crisis management and PR expenses related to a cyber incident.
  9. Business interruption coverage in the event that your company needs to shut down operations due to a cyberattack.
  10. Any other expenses that could arise from a cyber incident at your business.

What Does Cyber Insurance Not Cover?

While cyber insurance can provide valuable protection, it’s important to understand that it typically excludes certain types of risks.

For example, most cyber insurance policies exclude coverage for any damages caused by intentional acts or criminal activity.

This means that if you intentionally commit fraud or engage in other criminal activity, your cyber insurance policy will not provide any protection.

Additionally, many cyber insurance policies exclude professional services such as consulting, legal, or accounting services.

If you provide these types of services to your clients, you will need to purchase a separate professional liability policy to be fully protected.

Overall, cyber insurance can be a valuable tool to help protect your business, but it’s important to understand its limitations and exclusions to ensure that you are adequately protected.

It’s wise to build coverage for your business that protects you to the fullest, and a combination of cyber, tech E&O, and professional management liability means strong coverage.

Who Needs Tech E&O and Cyber Insurance?

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If you’re looking to secure comprehensive protection for your technology business against both Tech E&O and cyber risks, it’s a good idea to consider getting a policy that offers both types of coverage.

With the right insurance in place, you can rest easy knowing that your business is well-protected against any potential threats.

Difference Between Tech E&O and Cyber Insurance

Tech E&O insurance can help safeguard your company from costly lawsuits that could arise if a customer suffers financial losses due to an error made by your company.

In addition to Tech E&O coverage, cyber insurance can help protect your business against the costs associated with data breaches and other cyber-related incidents.

Whether you are in need of protection from data breaches, cyber attacks, or other threats, cyber insurance can provide peace of mind knowing that your business is well-protected against these risks.

To learn more about the right coverage for you business, check out Embroker’s digital insurance platform.

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