$1M Professional Liability (E&O) Insurance for Web Designers and Developers

For web designers and developers: a $1M Professional Liability (E&O) requirement means your policy must offer up to $1M for one claim over your web work.

What does a $1M requirement mean for web designers and developers?

Professional Liability (E&O, short for Errors and Omissions) covers claims that a mistake in your work cost a client money. A typical clause looks like this:

• Per claim: the most the policy pays for any one claim. Here, $1M.
• Aggregate: the most the policy pays for all claims in one policy year. Here, $2M. A $1M/$1M policy would not meet this clause.
• Claims-made: Professional Liability is almost always written this way. The claim must be made and reported while the policy is active, and the work must be after the retroactive date (the earliest work date the policy covers).
• "Hosting and maintenance": if you host or update client sites, say so in your application.

For more on reading limits, see Professional Liability limits explained.

Who asks web designers and developers for $1M?

You may see $1M from:

• Marketing and branding agencies that hire you to build sites under their name.
• Larger or data-heavy online stores that depend on your checkout, product pages and payment setup to make sales.
• Startups and software companies hiring you to build a web app, customer portal or marketing site.
• Schools, nonprofits and local governments, which may add their own insurance rules.
• Clinics and health practices that handle patient data through forms or booking tools.

Larger enterprise contracts often ask for $2M instead of $1M, which is a higher per-claim limit (see the $2M article).

How is $1M built?

At $1M, the limit is usually one primary policy (the policy that pays first), with no excess layers (extra policies above it). Web firms usually buy Technology E&O rather than Miscellaneous E&O (a general form for other professional services). Many also add Cyber. See Technology E&O vs. Miscellaneous E&O.

A commercial umbrella almost never covers Professional Liability. Clients usually cannot be added as an additional insured (an extra named party) on a Professional Liability policy. Where a carrier allows it, it is often limited to the client's liability arising from your services. A certificate of insurance (a one-page proof of coverage) does not add them either. Morrow can review your contract and policy for gaps, such as a retroactive date that leaves old sites uncovered or a contractual liability exclusion (which can remove cover for liability you took on only by contract).

What will underwriters ask for?

An underwriter decides whether to offer coverage and on what terms. For a web firm at $1M, they usually ask for:

• Your services, such as design, custom web apps, online stores, SEO, hosting or care plans, with a rough share of revenue.
• Whether you host sites, manage servers, or hold admin logins for client systems.
• Whether your sites collect payments, logins or personal data, and how you handle updates and backups.
• How you clear rights to images, fonts and code you add to client sites.
• Your contracts: written scopes, change orders, launch sign-off, and who owns the code.
• Subcontractors, revenue, largest client, prior claims, and your current policy and retroactive date.

What affects the cost?

• Type of work. Custom web apps, online stores and hosting usually cost more to insure than simple brochure sites.
• Data and payments. Sites that handle logins, personal data or payments usually raise the price.
• Revenue and client size. Bigger clients and projects mean bigger possible losses.
• Contracts and claims history. Clear scopes and launch sign-offs can help. Prior claims can raise it.
• Aggregate and retention. A higher aggregate usually costs more. A higher retention (the amount you pay on each claim before the policy pays, like a deductible) usually lowers the premium.

Frequently asked questions

Do I need $1M Professional Liability as a web designer or developer?

Yes, if your client contract sets that limit. Hypothetical examples: a plugin update breaks a store's checkout over a holiday weekend, and the owner blames you for lost sales. A site move drops old page links, and search traffic falls. A policy with the right coverage may help pay defense costs on a covered claim, even if the claim has no merit. What is paid depends on the policy wording, the retention and the limit.

Do I need Cyber as well as Technology E&O for web design work?

Possibly, if the clause names network security or privacy. Technology E&O covers mistakes in your work. Cyber covers breaches and hacks. See Professional Liability vs. Cyber.

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

No, not if the contract asks for a $2M aggregate. Request new quotes for a $1M/$2M policy. Morrow can ask carriers to keep your retroactive date, so work you did before the new policy starts stays covered (this is called prior acts coverage), where the market allows. Keep your current policy in force until the new one starts. Report anything that could become a claim to your current carrier first.

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.