Businesses’ growing reliance on technology has led to an ever-evolving and increasingly complex cyberthreat landscape.
Insurance is a crucial risk management tool, but getting the appropriate coverage for your business is key. “Errors and omissions” and “professional liability” are insurance terms that are used interchangeably; however, in our mission to serve a diverse range of business classes with the best insurance, At-Bay offers Technology Errors and Omissions (Tech E&O) and Miscellaneous Professional Liability (MPL) as two distinct insurance products.
Understanding the differences between these two types of insurance can help businesses as they strategize how to protect themselves from risk while working within their budgets. In this article, we explore tech E&O and MPL insurance, shedding light on their respective scopes and applications.
What Is Technology Errors and Omissions Insurance?
Tech E&O insurance is designed specifically to provide coverage for businesses — mostly businesses in the technology sector — for their professional liability as it pertains to any technology services/products they provide. This can include tech consultants, software developers, IT service providers, and others who may be exposed to potential liabilities arising from errors, omissions, or failure to deliver promised technology services.
In the highly competitive and rapidly evolving tech industry, technology errors and omissions insurance aims to protect businesses from claims arising out of mistakes or negligence in the provision of their services. It offers a shield against potential legal ramifications resulting from unintentional oversights, which can encompass errors in advice, inadequate work, or failure to perform as promised.
What Is Covered by Technology Errors & Omissions Insurance?
Tech E&O insurance offers a safety net for technology providers by covering a range of liabilities, which may include:
- Coverage for Contractual Obligations: Addresses legal costs and financial losses arising from alleged failures to meet contractual obligations and provides protection for disputes related to breaches of contractual agreements with clients or stakeholders.
- Warranty Breach Protection: Safeguards against claims stemming from breaches of warranties or guarantees associated with delivered technology solutions.
- Consequential Loss Protection: Provides coverage for financial losses suffered by clients due to the business’s technology products or services.
- Protection Against Intellectual Property Claims: Offers protection against claims of intellectual property infringement, covering legal defense expenses and potential settlements.
- Comprehensive Negligence Protection: Covers against claims of negligence, errors, or omissions in the delivery of technology services.
- Contractual Indemnity Support: Addresses claims arising from contractual indemnity agreements, offering financial assistance for legal defense and indemnification responsibilities.
What Is Miscellaneous Professional Liability Insurance?
MPL insurance is a type of insurance that provides protection to a spectrum of business classes in the professional services sector from damages or claims expenses arising from errors or omissions in the performance of their professional services. It’s called “miscellaneous” professional liability because it’s intended as a sort of catchall for organizations that provide professional services not otherwise addressed by a specialized insurance policy, such as Tech or Architects and Engineers Professional Liability.
While tech E&O insurance focuses specifically on the businesses that provide technology services, MPL insurance is designed to protect businesses that perform a wide range of services such as consultants, real estate agents, and advertising agencies. MPL typically covers the cost of legal defense, settlements, and judgments resulting from claims made against the policyholder.
Professionals can be held liable for mistakes or negligence in the course of their work, and the cost of defending against a claim or paying damages can be significant. MPL insurance provides financial coverage so professionals can protect their businesses and reputations in case of legal issues related to their services.
What Is Covered by MPL Insurance?
MPL insurance broadens the horizon of protection to encompass various professional services. It may include coverage for claims arising out of:
- Mistakes or Negligence: Provides coverage for mistakes or negligence in professional services, addressing liability arising from unintentional errors, omissions, or failure to meet industry standards.
- Disciplinary Proceedings: Includes legal support for disciplinary proceedings, protecting professionals against allegations of professional misconduct and the associated legal expenses.
- Subpoena and Record Request Assistance: Offers assistance in handling subpoenas and record requests, helping professionals manage the legal processes and costs associated with responding to such demands.
- Independent Contractors: Extends coverage to independent contractors, ensuring that liabilities stemming from their professional services are included in the policy for comprehensive protection.
- Personal Injury (Including Emotional Distress): Covers personal injury claims, encompassing harm beyond physical injuries, such as reputational damage or emotional distress, resulting from professional services.
- Legal Defense Costs: Covers legal defense costs, ensuring that the insurance provider bears the expenses associated with defending against covered claims, including court fees and attorney fees.
- Punitive Damages: Protects against punitive damages, providing financial protection in situations where a court imposes punitive awards as a form of punishment against the insured for willful misconduct or gross negligence.
Learn more about MPL insurance from At-Bay →
Is There a Difference Between Tech E&O and MPL Insurance?
Both Tech E&O and MPL insurance from At-Bay protect against the financial consequences of unforeseen errors or professional oversights. The difference lies in the types of services covered.
As the name would suggest, Tech E&O is specifically intended to cover businesses for professional liability that pertains to technology services and products. MPL is more “miscellaneous,” providing coverage for organizations that perform professional services not addressed by Tech E&O or another specialized insurance policy.
There are times when an organization may purchase both tech E&O and MPL if they have liability risk for technology services in addition to other types of professional services.
Comprehensive Risk Management From At-Bay
In the nuanced realm of technology and professional services, the choice between tech E&O and MPL insurance hinges on the types of services offered by the business.
At-Bay’s Tech E&O and MPL offerings stand out as comprehensive solutions that provide a safety net tailored to the needs and risk profiles of various professional liabilities. For companies that require both of these policy types, purchasing both from At-Bay offers the benefit of separate limits managed by the same expert Claims team.
Are you a broker looking to place insurance for a technology or professional services client? Explore the options today by visiting At-Bay’s Broker Platform.
Coverage is subject to and governed by the terms and conditions of each policy as issued. This information may not be used to modify any policy that might be issued, modify an existing policy, or imply that any claim is covered. For specific terms and conditions, please refer to the coverage form.
