$10M Professional Liability (E&O) Insurance for E-discovery Vendors

E-discovery vendors asked to carry $10M usually meet it with a primary policy plus follow-form excess layers, because that limit tends to come with the largest matters.

What does a $10M requirement mean for e-discovery vendors?

Professional Liability (E&O, for Errors and Omissions) covers claims that a mistake in your services cost a client money. A $10M clause might read:

• Per claim and aggregate: the most paid for one claim, and for all claims in one policy year. See how limits are written.
• Claims-made: Professional Liability almost always covers claims made and reported while the policy is active, for work after the retroactive date (the earliest work date covered).
• Primary plus excess: this sample allows a tower. If your clause is silent, confirm with the client that primary plus follow-form excess meets it.

Who asks e-discovery vendors for $10M?

$10M tends to come from:

• Large law firms adding you to a vendor panel for antitrust, class action or multi-district cases
• Government agencies and courts buying hosting or records work, often setting the limit in the request for proposal
• Banks, insurers and health systems sending regulated data to your platform

Two hypothetical claims show why. A software setting wrongly deletes emails from a case file, and a court penalizes your client. Or a review step misses emails that should have stayed private. Whether a policy responds depends on its wording.

How is $10M built?

A primary policy pays first. Each excess layer is a separate policy that pays only after the layers below it are used up. "$5M xs $5M" means a $5M layer above the first $5M. Compared with $5M, $10M usually needs more excess layers and more underwriters to review you. A $3M clause can often be met with a primary and one excess layer.

Each excess layer should follow form, meaning it adopts the primary policy's terms. Layers should usually share the same retroactive date, policy period and named insured (the business the policy protects). Many Professional Liability policies pay defense costs inside the limit, so check each layer treats defense the same way.

Vendors that host client data often buy Technology E&O (coverage for mistakes in technology services), sometimes with Cyber (coverage for data breaches). Attorneys need lawyers professional liability instead. Already carry a lower limit? Request new quotes through Morrow for a new primary or excess layers, keeping your retroactive date and prior acts coverage (coverage for work done before the new policy starts) where the market allows. Before switching, report any known production error or client complaint to your current carrier.

What will underwriters ask for?

An underwriter decides whether to offer coverage and on what terms.

• Revenue by service and your largest matters
• Peak data hosted, where it lives, and your encryption, multi-factor sign-in and security audits
• Quality checks on processing, privilege and redaction, and who signs off on productions
• Attorney supervision of review teams and how you vet subcontract reviewers
• The contract asking for $10M, your standard client agreement, five years of loss runs (a report of past claims), and current policies

What affects the cost?

• Service mix. Hosting and review on large matters may cost more to insure than collection.
• Data volume and sensitivity. More hosted or regulated data can raise the cost of one error.
• How the tower is built. The primary layer usually costs the most per $1M of limit. Higher excess layers usually cost less per $1M.
• Claims history. Past claims can shrink the limit offered and raise prices.
• Retention and defense terms. Retention is what you pay per claim before the policy pays, like a deductible. A higher one usually lowers premium.

Frequently asked questions

Can a small e-discovery firm get $10M Professional Liability (E&O)?

In some cases, yes, depending on underwriting. It is usually built from a $1M to $5M primary plus excess layers. Strong security and a clean claims history often help.

Can my commercial umbrella cover a $10M Professional Liability requirement?

Almost never. A commercial umbrella usually excludes professional services. You usually need follow-form excess Professional Liability. Read more on umbrellas.

Can the law firm be added as an additional insured on my Professional Liability?

Usually not. Standard Professional Liability forms do not name clients as insureds, and any extension is limited and up to the carrier. Some clients accept a certificate of insurance (a one-page proof of coverage) that lists every layer with its policy number and limit.

How long does a $10M Professional Liability tower take?

Several weeks is common, though it varies. Each layer is underwritten, and excess carriers often wait for the primary quote.

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.