What Insurance Limits Should My E&O Insurance Policy Have?

Technology companies should have an E&O policy. E&O stands for Errors and Omissions. An E&O policy provides a different type of coverage than what a general liability policy provides.

Examples include breach of contract or negligence of your professional services.

E&O policies generally start at 1 million of coverage.

How Much is Enough?

Is 1M, 2M, 5M the appropriate amount of insurance for my company? 
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This is a difficult question.

To many companies I speak with allow their clients contracts requirements determine their company's insurance coverage.

Example:

To do business with a new client, they may require 5M E&O limits from your company.

You comply because you want the contract. You call your agent and request to raise your limits to 5M.

Is this enough insurance? Too Much?
My recommendation is to have a conversation with your agent.

Questions to Help Kick Start Your Conversation

1. What liability limits do peers in my industry buy?
2. What are some common liability claim scenarios in tech space (SAAS, FINTECH, EDTECH etc.)
4. How does the number of clients I serve or the amount of revenue per client affect my limits?
3. What best practices should I put in place to protect my brand and reputation?

This brief list is not meant to be exhaustive.
The intent is to build your confidence and start a conversation.

If you would like to have this conversation with me here is a link to my calendar.

Terry Grier is an agent in Austin Texas serving technology and life science companies.