$2M Professional Liability (E&O) Insurance for Technology and Media Firms

For technology and media firms, a $2M requirement usually means $2M per claim and $2M total for the year, so a $1M/$2M policy may not meet the clause.

What does a $2M requirement mean for technology and media firms?

Professional Liability (E&O, short for Errors and Omissions) covers claims that your work cost a client money. For tech firms, the usual form is Technology E&O. It can respond when, for example, a software bug stops a client's orders. A $2M clause often reads like:

• Per claim and aggregate (see limits explained): the most the policy pays for one claim, and for all claims in the policy year. This clause asks for $2M on both.
• Certificate wording: A certificate of insurance (a one-page proof of coverage) may show "$2M" as the aggregate only. Check the per-claim figure.
• "Including network security and privacy": the client also wants Cyber coverage, which pays for data breaches and hacking losses.
• Claims-made: Professional Liability almost always covers claims made and reported while the policy is active, so clauses ask you to keep coverage after the contract ends.

Who asks technology and media firms for $2M?

Many clients ask for $1M. $2M tends to come up when the client is bigger, or your work touches their systems, data or brand.

• Enterprises hiring software developers or IT consultants under a master service agreement (the main contract that sets terms for later projects).
• Buyers of cloud software (software-as-a-service, or SaaS) whose security teams may set a $2M minimum for their vendors.
• Companies hiring a managed service provider (an outside firm that runs their IT) for their network, help desk or backups.
• Large brands hiring marketing, SEO or content firms.
• Publishers and media companies licensing photos, video or text.

How is $2M built?

Many $2M programs are one primary policy (the policy that pays first) written at $2M/$2M. If a client asks for more, see $3M for technology and media firms.

Some clients also accept a $1M primary policy plus a $1M excess layer, a second policy that pays after the first limit is used up. It should follow form, meaning it adopts the primary policy's terms and retroactive date. Confirm with the client that this meets the clause. A commercial umbrella almost never counts toward this limit.

Designers, photographers, marketers and publishers also face content claims, such as copyright, trademark or defamation (false statements that harm a reputation). Media liability usually covers these, inside a Technology E&O policy or on its own. On a combined policy, check whether E&O, Cyber and media share one $2M limit.

What will underwriters ask for?

An underwriter is the insurer's reviewer who decides whether to offer coverage. Expect questions like these:

• Revenue, largest clients and your services (software development, managed IT, hosting, or content work), with a rough revenue share for each.
• The $2M contract and your standard client agreement, including any limitation of liability clause (a cap on what you owe a client).
• Security practices such as multifactor authentication (a second login step, like a text code), backups and access controls.
• For content work, how you clear rights and licenses.
• Loss runs (your carrier's report of past claims), known incidents, and your current retroactive date.

What affects the cost?

• Type of work. Managed IT, payments software and regulated clients often cost more than design work.
• Revenue and contract size. Bigger contracts mean bigger possible losses.
• Data, access and controls. Holding client data or admin access usually raises risk, as can prior claims or weak controls.
• Retention. Retention is the amount you pay per claim before the policy pays, like a deductible. A higher retention usually lowers the premium.
• Shared or separate limits. Separate limits for E&O, Cyber and media may cost more than one shared limit.

Frequently asked questions

I carry $1M. How do I get $2M Professional Liability as a tech or media firm?

Request new quotes through Morrow, for a $2M primary policy or an excess layer above your $1M. Morrow can ask each insurer to keep your retroactive date and prior acts coverage (cover for past work) where the market allows. Timing varies by insurer and underwriting, so ask for the start date you need early. Coverage may not begin until the insurer confirms the policy is in place.

Can my client be added as an additional insured on my $2M Professional Liability as a tech or media firm?

Usually not by default. Additional insured means adding someone to your policy so it protects them too. Professional Liability protects you against client claims, so it usually does not include clients. Some insurers may offer limited wording for this in certain cases, but do not count on it. Many clients accept a certificate of insurance instead. If your contract demands it, send the clause to Morrow and we can review it.

Does Technology E&O pay my defense costs on top of the $2M?

Often not. Many Professional Liability policies pay defense costs inside the limit, so legal fees reduce what is left to settle a claim. The declarations page (the summary at the front of the policy) shows how yours works.

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

Usually not. It pays at most $1M on any one claim.

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.