Tech E&O vs Professional Indemnity: what's the difference?

Short version: not much.

Tech E&O, or Technology Errors and Omissions to use the name its mother gave it, is Professional Indemnity insurance for technology businesses.

More or less the same product but with a different label. The label is mostly an American one too, by the way.

So if you've been told you need "Tech E&O" and you already hold Professional Indemnity, you probably haven't found a gap in your cover. You've found a naming difference "(“probably” is the operative word, there).

Please be sure not to confuse Tech E&O with Cyber & Data, which is something else entirely.

What Professional Indemnity does

Professional Indemnity covers you when a client says your work, your advice, or a mistake you made cost them money. It doesn't matter whether they're right or not. Defending yourself when you're completely in the clear still costs real money, and PI is what pays for it.

Legal defence, compensation if a claim lands, negligence allegations, errors and omissions in what you delivered. That's the job it does.

For a tech business, good PI cover is usually extended to include Technology Errors and Omissions. That's the part covering claims from software failing, systems going down, or a product not performing the way the contract said it would. If your clients depend on something you built, sell, or run, your policy needs to say so.

So where does the difference mean something?

The difference is in the wording, and in who's asking.

"Tech E&O" tends to show up as a requirement in US contracts. For a lot of our customers, a client in the States asks for it by name, and upon checking the policy our customer doesn’t see it written there. Cue the panic email.

As Alex Littlejohn, our Insurance Operations Director, puts it:

When you look at your insurance schedule, you might only see 'Professional Indemnity' - often triggering a moment of panic when a client demands 'Tech E&O'. However, a modern UK policy designed for tech companies usually covers the exact same risks. The devil is in the definitions: while standard PI covers failures in traditional 'Professional Services' (like advice or design), Tech E&O broadens that definition to explicitly include the 'failure of technology products,' 'provision of software,' or 'system integration.' Ultimately ensuring that your Professional Indemnity policy is designed for technology companies and extends to include the more acute exposure to failure in software, is far more important than the terminology it uses.

Most of the time your PI already does what you need it to. Sometimes it doesn't quite meet the specific terms an American contract sets out, though. The only way to know is to read the requirement against your policy, rather than assume the words matching, or not matching, tells you anything.

A quick illustrative example

A SaaS business signs a US client. The contract demands "Technology E&O of $2m." Their UK broker had sold them Professional Indemnity with a tech extension at £1m. On paper, two different products at two different limits. In practice, the cover does the same thing, but the limit and the wording needed adjusting to satisfy the contract. A five-minute check turned a deal-blocker into a non-issue.

The honest takeaway

You almost certainly don't need to buy Tech E&O and Professional Indemnity as two separate things. For a UK tech business, they're the same cover wearing a different name. What you do need is to make sure your PI is built for what you do, and that it holds up when a US contract asks for it by the American name.

If you're not sure yours does, send it over. We'll check it properly for you.