Errors and omissions insurance cost for technology companies and startups

What errors and omissions insurance covers

Errors and omissions insurance, also called professional liability or technology E&O, pays your legal costs and any settlement when a client alleges your work caused them a financial loss. For a technology company that usually means a software bug, a missed deadline, a bad implementation or a breach of contract claim.

It does not cover data breaches or ransomware on their own. Those events sit under cyber liability. In 2026 most carriers sell the two covers on one combined form, but the price still splits into an E&O load and a cyber load. This guide focuses on the E&O side.

Typical premium bands by stage

These are wide ranges because underwriting varies sharply by vertical, contract terms and claims history. Treat them as a starting point, not a quote.

• Prerevenue to first revenue. 1,000 to 3,000 dollars a year for a 1 million limit, assuming no regulated clients and no prior claims.
• 1 to 5 million dollars in revenue. 3,000 to 9,000 dollars a year for a 1 million limit. A clean fintech or healthtech record sits at the top of this band.
• 5 to 25 million dollars in revenue. 8,000 to 35,000 dollars a year. At this stage contract size and enterprise concentration matter more than revenue itself.
• Above 25 million dollars in revenue. 25,000 to 100,000 dollars a year or more, depending on limit, retention and whether the company has a dedicated risk manager.

The five drivers that move the price

Underwriters price errors and omissions by asking how large a mistake could be and how likely one is. The main inputs are:

• Revenue. More revenue means more clients, which means more potential claimants. It is the baseline multiplier in almost every rate filing.
• Client contract size. A single contract worth 40 percent of revenue is a single loss that could wipe out the company. Underwriters add load for concentration.
• Vertical. A marketing analytics tool is viewed as lower risk than a payments platform, a clinical decision support tool or a trading system.
• Claims history. One reported circumstance in the last five years can add 25 to 75 percent to the renewal. Multiple circumstances make some carriers decline.
• Coverage limit and retention. Moving from 1 million to 2 million typically costs less than double. A higher retention lowers the premium but increases the cash you must pay on a claim.

How vertical changes the rate

Not all technology companies are priced the same. A horizontal SaaS tool with many small contracts is usually the cheapest risk. Verticals that touch money, health or regulated data pay more because the downstream loss is larger.

• Lower load: marketing tech, project management software, internal tools, analytics dashboards.
• Moderate load: HR tech, edtech, ecommerce infrastructure, general business software.
• Higher load: fintech, healthtech, insurtech, legal tech, cybersecurity services, any product that processes payments or personally identifiable data at scale.

Claims history and the retroactive date

Errors and omissions is written on a claims made basis. That means the policy in force when the claim is first reported pays it, even if the mistake happened years earlier. The retroactive date on the policy is the cutoff. A new startup buying its first policy usually gets a retroactive date equal to the policy start date, which means prior work is not covered.

This matters at renewal. Switching carriers to save money can reset the retroactive date and leave older projects uninsured. If you do switch, negotiate prior acts coverage or a retroactive date that matches your original policy.

How to lower the premium before renewal

You cannot change your revenue overnight, but you can influence the parts of the price that underwriters view as controllable.

• Cap liability in client contracts. A mutual cap on damages, or a limitation of liability clause, directly reduces the size of the loss an insurer might pay.
• Reduce customer concentration. Spreading revenue across more clients lowers the severity of a single claim.
• Document your delivery process. Underwriters like to see change control, acceptance testing and signed off milestones. It shows claims are less likely to succeed.
• Run security and QA checks. A clean SOC 2 or ISO 27001 report does not directly price E&O, but it signals operational maturity and can help at the margin.
• Pick the right retention. A higher retention lowers the rate, but only choose an amount your balance sheet can absorb.

Standalone E&O or combined with cyber

Most technology companies below 25 million dollars in revenue should buy a combined technology E&O and cyber liability form. It removes coverage disputes, uses one retention and is usually cheaper than two separate policies.

The main reason to split them is limit strategy. If your customer contracts demand 5 million of E&O but you only need 1 million of cyber, separate towers can be more efficient. Above 50 million dollars in revenue this becomes more common.

Get a tailored range

Use the technology E&O cost calculator to see a range based on your revenue, vertical, client contract size and claims history. It is free, shows the assumptions behind every number and takes no personal details.