$2M Professional Liability (E&O) Insurance for App Developers

For app developers whose client asks for $2M: you usually need a $2M per claim Professional Liability (E&O) limit, built as one primary policy or a primary plus follow-form excess.

What does a $2M requirement mean for app developers?

Professional Liability (E&O, short for Errors and Omissions) covers claims that a mistake in your work cost a client money. Most app developers buy a form called Technology E&O, often combined with Cyber. A $2M clause in an enterprise MSA may read like this (see limits explained):

• Per claim and aggregate: the most the policy pays for one claim, and for all claims in a policy year. Here, $2M each.
• Claims-made: Professional Liability almost always covers claims made and reported while the policy is active, for work done on or after the retroactive date (the earliest date of work the policy covers).
• Hosting and support: if the clause covers apps you run after launch, your policy should list those services.

$1M often fits smaller app contracts (see $1M Professional Liability for app developers). $2M is common when the client is large or the app handles money or health data.

Who asks app developers for $2M?

$2M tends to show up when the client is larger or the app carries more weight:

• Large companies that send a standard vendor MSA to every software supplier.
• Banks, lenders and fintech firms hiring you to build a payments or account app.
• National retailers and restaurant groups whose ordering app drives many sales.
• Health systems and health tech firms building patient apps.
• Agencies and prime contractors that pass their client's limits down to you.

How is $2M built?

At $2M, the limit is often one primary policy (the policy that pays first) at $2M/$2M, with Technology E&O and Cyber packaged together. Sometimes it is a $1M primary plus a $1M excess layer (a second policy that pays after the first is used up). The excess should follow form, meaning it uses the primary policy's terms.

A commercial umbrella almost never covers Professional Liability. Clients usually cannot be added as an additional insured (a party with direct rights under your policy). Some Technology E&O or Cyber carriers may offer it, limited to the client's liability from your work, when a written contract requires it. Check your contract wording early. If you carry $1M today, request new quotes for $2M through Morrow, keeping your retroactive date and prior acts coverage (cover for work done before the new policy starts) where the market allows. Keep your current policy until the new one starts, and report any known incident to your current carrier before you switch.

What will underwriters ask for?

An underwriter is the person at the insurer who decides whether to offer coverage and on what terms. For an app developer at $2M, they often look more closely at:

• Your largest contracts, what each app does, and how many users it has.
• Whether your apps take payments or store health or financial data.
• Whether you host or maintain apps after launch, and any uptime promises.
• Your release process: testing, code review and how fast you can roll back a bad update.
• Contract terms, such as fixed-price deals, deadline penalties and subcontractors.
• Revenue by service, prior claims, loss runs (a report of past claims), and your retroactive date.

What affects the cost?

• What the app does. Apps that move money, hold health data or run a client's operations usually cost more than simple apps.
• Data and Cyber. More user records, or more sensitive records, usually raise the price when Cyber is included.
• How the $2M is built. The structure of the $2M (one policy or layers) affects price.
• Retention and claims history. The retention (what you pay on each claim before the policy pays, like a deductible) and any past claims both affect price.

Frequently asked questions

Do I need $2M Professional Liability as an app developer?

Yes, if your contract says so. A $2M clause means your policy must pay up to $2M per claim. Hypothetical examples: an update double-posts bank transfers for a weekend, or a sync bug wipes out a month of work orders. Missed deadlines may be excluded.

Is $1M/$2M enough if my app contract says $2M?

Not if the clause asks for $2M per claim. It meets the clause only if the clause asks for $1M per claim and $2M aggregate. Some Technology E&O policies are written $1M/$1M, which also falls short. You likely need a $2M/$2M policy or a primary plus follow-form excess. Confirm with the client that primary plus excess meets the clause.

Do I need Cyber as well as Technology E&O for my app?

Often yes when your app stores user data. Technology E&O responds to mistakes in your services. Cyber responds to breaches. See Professional Liability vs. Cyber.

What if the client later asks for more than $2M for my app?

You would likely need excess layers. Some MSAs step up to $3M or $5M for larger or riskier apps. Those limits are usually built with excess layers and rarely found online. Morrow can help you find them. See $3M Professional Liability for app developers.

This article is general information, not legal advice or a coverage determination. Coverage depends on the actual policy wording, carrier underwriting and your contract terms.