What San Jose Tech Companies Should Know About Tech E&O Insurance

Your Code Is Your Liability

For a San Jose tech company, the product is software and the delivery network is the cloud — which means your liability walks in the front door with every client contract. A bug that corrupts a customer's data, a missed service-level commitment that triggers contract penalties, a negligent implementation that costs a client six figures: these are technology errors & omissions (Tech E&O) claims, and general liability won't touch them.

General liability covers bodily injury and property damage. Data is treated as intangible property, and modern GL policies explicitly exclude financial losses caused by your work product. Tech E&O is the policy built for that exposure.

What Tech E&O Covers for San Jose Tech Companies

• Software defects and failures — a bug that corrupts a client's data or crashes their operations
• Missed service levels — downtime or performance shortfalls that trigger contract penalties
• Negligent implementation or consulting — bad advice, botched migrations, integration errors
• Intellectual-property allegations — claims that code you delivered infringes someone's IP
• Defense costs — included within the policy, and in professional-liability litigation, defense is usually the largest number by far

One point founders miss: many enterprise and mid-market procurement teams require proof of Tech E&O — often at $1M or $2M limits — before signature. The policy is a sales enabler, not just protection.

What Tech E&O Does Not Cover

• Bodily injury and property damage — that's GL territory; Tech E&O addresses financial harm
• Fraudulent funds transfers, sometimes — business email compromise is covered under some policies and excluded under others, one of the most commonly misread lines
• Employment disputes — wrongful termination and harassment claims belong to EPLI, not E&O
• Pre-existing work without a retroactive date — Tech E&O is written claims-made, so work done before your retroactive date may be uninsured

Tech E&O vs. Cyber Liability — You Usually Need Both

These are different policies that get confused constantly. Tech E&O responds when your product or services cause a client's loss. Cyber liability responds when your own systems are the problem — a breach of your customer records, ransomware on your production environment, or a misconfigured database leaking data.

Most tech companies carrying client data need both. Many carriers bundle them as a Tech E&O + Cyber package, which is often cleaner and cheaper than two separate policies.

What It Costs for San Jose Tech Companies

For early-stage tech companies, Tech E&O premiums typically start around $1,500 to $3,500 per year for $1M/$1M limits. Pricing depends on revenue, headcount, the type of technology, your target market, and contract size — with D&O, EPLI, and higher limits scaling up as the company grows.

Two factors reliably move the number: your security posture (MFA, tested backups, incident-response plan) and your contracts (liability caps, SLA language, indemnification terms). Carriers read both closely — and the only way to know your actual number is to compare real quotes.

San Jose Tech E&O FAQ