For web designers and developers whose client wants $3M: it can be one $3M primary policy or a smaller primary plus a follow-form excess layer, and Morrow can help you find it.
The short answer
- $3M is a less common Professional Liability limit for web firms. It mostly comes from large-company vendor contracts and from sites that take payments or hold personal data.
- It may be one $3M primary policy, or a $1M or $2M primary plus a follow-form excess layer. Confirm with the client that primary plus excess meets the clause.
- $3M is rarely available online, where small-business products are often capped at $1M or $2M. It is usually placed by a broker. Morrow can help you find it.
What does a $3M 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. Web firms with large contracts often buy Technology E&O, a form built for tech services. It is often paired with Cyber, which covers data breaches and network attacks. Design-only shops often buy a general E&O form instead. See Technology E&O vs. Miscellaneous E&O. A $3M clause might look like this:
Illustrative contract wording
Contractor shall carry Technology Errors and Omissions insurance with limits of not less than $3,000,000 per claim and $3,000,000 annual aggregate, covering website design, development and hosting services under this Agreement. Coverage shall be maintained for two (2) years after the final statement of work ends.
Illustrative example only. Your contract's wording controls.
- Per claim and aggregate: the most the policy pays for one claim, and for all claims in a policy year. Here, both are $3M.
- Claims-made: Professional Liability almost always covers claims made and reported during the policy period, for work after the retroactive date (the earliest work date covered).
- Silent on stacking: this clause does not say whether primary plus excess counts.
Who asks web designers and developers for $3M?
Many web projects ask for $1M, and larger ones often ask for $2M. A $3M clause usually comes with enterprise or data-heavy work, and a $2M primary often needs an excess layer to reach it. It tends to come from:
- Large companies whose vendor MSA (master services agreement) sets one high limit for every tech supplier.
- E-commerce brands hiring you to rebuild a store or checkout.
- Banks, credit unions and insurers that need login pages, loan forms or quote tools.
- Health systems building patient portals.
- Public agencies rebuilding service portals.
- Agencies and prime contractors passing their client's limit to you.
How is $3M built?
A primary policy pays first. An excess policy pays only after the primary limit is used up. "$1M xs $2M" means a $1M layer that sits above the first $2M.
Example A: single policy
Example B: two layers
Example C: two layers
The excess should follow form, meaning it uses the same terms as the primary policy. Every layer should share the same retroactive date, policy period and named insured (the business the policy covers). A commercial umbrella almost never covers Professional Liability, so it usually cannot fill the gap (see does an umbrella cover Professional Liability).
If you carry $1M or $2M today, request new quotes through Morrow for a $3M primary or an excess layer. Morrow can ask carriers to keep your retroactive date and prior acts coverage (cover for past work before the new policy starts) where the market allows. These structures are rarely found online. Morrow can help you find them.
What will underwriters ask for?
At $3M, underwriters may ask about:
- Your mix of work: design only, custom builds, e-commerce, plugins, and payment or CRM integrations.
- Whether your sites take payments, collect personal data, or touch health or financial records.
- Whether you host sites or run care plans, plus any uptime promises.
- How you launch and migrate: staging, testing, backups and rollback plans.
- The contract asking for $3M, including launch deadlines, indemnity (a promise to cover the client's losses) and any limitation of liability clause (a cap on what you owe a client).
- Revenue, freelancer use, loss runs (a report of past claims) and your current policy.
What affects the cost?
- What the sites do. Stores, portals and payment flows usually cost more to insure than brochure sites.
- Contract terms. Launch penalties and broad indemnity add risk.
- How the $3M is built. The primary layer usually costs the most per $1M of limit.
- Hosting and data. Hosting sites or storing customer records usually raises the price.
- Retention, defense terms and claims history. Retention works like a deductible. Many policies pay defense costs (legal fees) inside the limit, so fees reduce the limit left for claims.
Frequently asked questions
What could a $3M claim against a web firm look like?
These are hypothetical. A store migration breaks the cart during a holiday sale, and the client says it lost orders. A bank's loan form drops entries for weeks. A site you host goes down and takes bookings offline.
Can a small web design studio get $3M?
It may be possible, depending on revenue, services, hosting, data and the contract. Limits above $1M or $2M often need a broker. A primary plus follow-form excess is possible but less common for small firms. Morrow can help you find it.
Can my client be listed as an additional insured?
Usually not. Additional insured status (naming the client on your policy) is not automatic on Professional Liability. Some policies may allow it when a written contract requires it, but that is not the norm. A certificate of insurance (a one-page proof of coverage) is what most clients accept. It gives the client no rights under the policy.
What if a client asks for more than $3M?
It is uncommon for web firms. $5M is very rare online and almost always needs a broker. Morrow can help you find it.
Looking for $3M in Professional Liability? Morrow can help.
Send us the insurance requirement from your contract and your current policy, if you have one. Morrow can review both and request quotes for a $3M primary or a primary and excess structure, keeping your retroactive date where the market allows.
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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.