$10M Professional Liability (E&O) Insurance for IT Consultants

IT consultants usually reach $10M in Professional Liability by stacking a primary policy with excess layers, often because a large enterprise, bank or health system client requires it.

What does a $10M requirement mean for IT consultants?

Professional Liability (E&O, short for Errors and Omissions) covers claims that a mistake in your work cost a client money. Most IT consultants buy it as Technology E&O, often combined with Cyber (coverage for data breaches and network attacks). See Technology E&O vs. Miscellaneous E&O. A $10M clause in an enterprise MSA (master service agreement) may read like this:

• Per claim and aggregate: the most paid for one claim, and for all claims in a policy year.
• Cyber is named: "network security and privacy" means Cyber.
• Claims-made, three years after: Professional Liability is almost always claims-made (it covers claims made while the policy is active). You would usually renew every layer, with the same retroactive date (the earliest date of work covered), for that period.
• Stacking allowed: this clause permits primary plus excess. If yours is silent, confirm with the client that primary plus follow-form excess meets the clause.

Who asks IT consultants for $10M?

Most IT consultants are asked for $1M or $2M. Larger enterprise deals move to $5M, and $10M often reflects the client's size more than yours. It often comes from:

• Global enterprises that use one MSA for every tech vendor. See MSA insurance requirements.
• Large banks, insurers and payment processors hiring you for core systems work.
• Hospital systems and health plans where you touch patient records.
• State agencies setting the limit in the RFP.
• One large engagement, such as an ERP (business management software) rollout or data center move.

How is $10M built?

A primary policy pays first. Each excess layer pays only after the layers below it are used up. "$5M xs $5M" means a $5M layer above the first $5M. A commercial umbrella (an extra liability policy that sits over general liability) almost never adds to Professional Liability.

Each excess layer should follow form, meaning it uses the primary policy's terms. If your primary includes Cyber, check that every layer sits over it. All layers should share one retroactive date. Many policies pay defense costs inside the limit.

What will underwriters ask for?

An underwriter is the person at a carrier who decides whether to offer coverage. Each carrier in the tower may ask questions like these:

• Whether you only advise, or also run migrations, ERP setups or managed support.
• Your admin access to client systems, and how you plan cutovers (the switch to a new system) and rollbacks.
• The MSA and statement of work (the document that sets out the project) asking for $10M, including the indemnity clause (your promise to pay for certain client losses) and any limitation of liability clause (a cap on what you owe a client).
• Revenue by service, your largest contracts, loss runs (reports of past claims) and your current policy with its retroactive date.

What affects the cost?

• How hands-on you are and your client industries. Running live systems, or banking and healthcare work, usually costs more.
• Tower shape. The primary layer often costs the most because it is most likely to pay.
• Contract terms and claims history. Unlimited indemnity or past claims can raise the price or shrink the limit offered.
• Retention and Cyber limits. A retention works like a deductible. A higher one usually lowers premium.

Frequently asked questions

What could a $10M claim look like for an IT consultant?

A $10M claim could come from a failed system cutover. Two hypothetical examples: an ERP cutover fails and a manufacturer cannot ship orders for weeks, or a data center move runs months late and a bank pays to run two sites.

I have $2M Professional Liability today. How do I get to $10M as an IT consultant?

Request new quotes through Morrow for a new primary at a higher limit, or excess layers above a new primary. Morrow can ask carriers to keep your retroactive date and prior acts coverage (coverage for earlier work) where the market allows. Report any known incident to your current carrier before you switch.

Can my client be added as an additional insured on my IT consulting Professional Liability?

Usually not, though some carriers will. Some add a client as an additional insured (a party covered under your policy) on Professional Liability, usually only for claims arising from your work. Many do not, and each excess layer must agree. Many clients accept a certificate of insurance (a one-page proof of coverage) instead, so check what your contract requires.

How long does it take an IT consultant to place $10M in Professional Liability?

It often takes several weeks. Each layer is underwritten separately, so send your contract requirement early.

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.