Tech E&O vs. cyber liability: what is the difference?
Short answer
Tech E&O responds when a client alleges your software, platform, or services failed to perform as promised. Cyber liability responds to data breaches, ransomware, network interruption, and the privacy or regulatory claims that follow. Most technology firms need both because the triggers are different.
| Attribute | Tech E&O | Cyber liability |
|---|---|---|
| Trigger | Alleged failure or negligence in your services | Breach, ransomware, or network event |
| Who claims | Clients and customers | Customers, regulators, and payment brands |
| Defense costs | Included, usually inside the limit | Included, with separate first-party response costs |
| Notification and credit monitoring | Not included | Included |
| Missed deadline or failed implementation | Included | Not included |
| Ransomware and system restoration | Not included | Included, often with sublimits |
| Typical starting limit | $1M per claim, set by client contracts | $1M, rising with data volume |
Which one do you need?
If a client can sue you for a failed project, you need tech E&O. If you hold customer data or run production systems, you need cyber. Buying only one leaves a predictable gap, and enterprise contracts usually require both.
Common questions
- Can one policy cover both exposures?
- Some carriers package technology E&O and cyber together, but check that each trigger has its own adequate limit rather than one shared sublimit.
- Does tech E&O cover a data breach caused by my software?
- Usually only the services failure side, not the breach response costs. Breach notification, forensics, and privacy claims belong to cyber coverage.
- Which one do enterprise clients ask for first?
- Typically tech E&O, because the contract is about service performance, but most procurement reviews ask for certificates showing both.