When you run a small business today, whether in retail, real estate, construction, or auto services, technology is probably part of your daily operations. From online sales platforms to customer management tools, tech helps you stay competitive. But what happens when that technology doesn’t perform as expected?
That’s where Technology Errors & Omissions (E&O) insurance comes in.
Most people think their general liability insurance will cover any mishaps, but here’s the catch: commercial general liability (CGL) usually doesn’t cover claims of financial harm unless there’s physical damage. So, if a mistake in your service or software causes a client to lose money, you could be left footing the bill.
Let’s break it down:
- What Does Tech E&O Cover?
Tech E&O steps in when your service, advice, or product fails to perform and causes a financial loss to a third party. It covers not only the damages but also the cost of legal defense. - Real-World Examples:
- A coding error on your website stalls a client’s business.
- A faulty part you installed causes equipment downtime.
- A team member recommends a network change that leads to a system crash.
In each of these situations, there’s no physical damage, just financial loss, and that’s where your general liability policy will fall short.
- What’s Not Covered?
E&O usually won’t cover product recalls or non-financial losses, and it excludes deliberate or dishonest acts. It’s important to review the policy details with a professional.
Tech E&O insurance is not just for IT companies. If you rely on technology in your business, and who doesn’t these days, you should strongly consider adding this layer of protection.
For more help with protecting your business from technology-related risks, contact McHugh Insurance Group.