PI insurance explained

In short: Technology professional indemnity (Tech PI, sometimes called technology errors & omissions or E&O) is insurance for firms that supply software, IT or technology services. It pays legal defence costs and damages if a client alleges your product, code, advice or work failed and caused them financial loss. Modern tech PI policies usually blend in first-party and third-party cyber cover.

What tech PI actually covers

Standard professional indemnity was written with accountants, solicitors and consultants in mind — people who give advice. Technology businesses are different. They ship products, host data, integrate systems and take responsibility for uptime. A generic PI wording often struggles to respond when the "professional service" is a piece of software or a managed IT contract.

Technology PI closes that gap. It is designed around how tech firms actually create risk. A typical policy responds to allegations such as:

• Negligent performance of professional services — your development, consultancy, implementation or support work fell short and cost the client money.
• Product failure — your software, app or hardware did not perform as specified or promised.
• Breach of contract or failure to deliver — a project overran, a deliverable was defective, or an SLA was missed.
• Intellectual property infringement — a claim that your product infringed a third party's copyright, trade mark or design (patent infringement is commonly excluded, so check the wording).
• Breach of confidentiality and, in many wordings, defamation arising from your professional work.

Crucially, tech PI covers defence costs as well as any damages or settlement. In practice, the legal cost of fighting an unfounded allegation can be as damaging as a claim that succeeds, so this matters even when you have done nothing wrong.

Tech PI vs E&O: same thing?

Yes, essentially. "Errors & omissions" (E&O) is the term used more in the US market; "professional indemnity" (PI) is the UK and Commonwealth term. For a UK technology company the two describe the same product. You may see a policy branded "technology E&O", "tech PI" or "professional and technology liability" — read the insuring clauses rather than the label.

Why tech PI and cyber are increasingly one policy

Here is where technology cover has genuinely evolved. A software or IT firm faces two overlapping exposures that used to sit in separate policies:

• The claim against you (third-party / liability). A client sues because your product or service caused their loss — classic PI/E&O territory.
• The incident that hits you (first-party / cyber). You suffer a data breach, ransomware attack or system outage that costs your own business money — classic cyber territory.

For a tech company those two events are often the same event. If a vulnerability in your platform is exploited, you may simultaneously face your own breach-response costs and a negligence claim from every customer whose data was exposed. Splitting that across two insurers can create coverage gaps and arguments about which policy responds. See also our roadmap for VC-backed and scaling companies.

That is why many UK insurers now offer combined technology PI and cyber wordings, or bolt a cyber section onto a tech PI base. A blended policy typically brings together the following.

The practical benefit of a single combined policy is one insurer, one claims contact and no gap where a tech PI insurer and a cyber insurer each say the other should pay.

Who needs technology PI?

Tech PI is relevant to almost any business whose product or service is technology itself, including:

• Software developers and SaaS providers
• IT consultants, systems integrators and managed service providers (MSPs)
• Web and app development agencies
• Cloud, hosting and data centre providers
• IT contractors and freelancers
• Hardware manufacturers and resellers who also configure or support systems

It is also frequently a contractual requirement. Enterprise and public-sector clients routinely insist that suppliers hold technology PI — often to a specified limit — before they will sign. If you win work through tenders or master service agreements, you will likely be asked to evidence it.

How much cover do you need?

Limits are usually offered as generic options such as £1m, £2m or £5m, and can go higher for larger firms. The right figure depends on:

• Contract requirements — your biggest client's demanded limit often sets the floor.
• Contract value and exposure — the potential loss a client could suffer if your product fails, not just your fee.
• Data volumes — how much personal or sensitive data you hold or process, which drives the cyber exposure.

Technology PI is almost always written on a claims-made basis, meaning the policy in force when a claim is made responds — not the policy in force when you did the work. That makes continuity important. If you let cover lapse, past work may be left unprotected, which is why retirement or run-off cover matters when a business winds down.

An experienced broker will match the wording to how your business genuinely operates. Start a quote with Apex and we will help you size the limit and confirm the cyber elements are properly built in.

Common questions

Does technology PI replace a standalone cyber policy?

Sometimes. A well-structured blended tech PI and cyber policy can cover both your liability to clients and your own breach-response costs. But wordings vary widely — some tech PI policies include only limited cyber, others a full first-party section. Check exactly what is inside before assuming you do not need standalone cyber.

Is tech PI the same as public liability?

No. Public liability covers injury to people or damage to physical property caused by your business. Technology PI covers financial loss a client suffers because your professional work, advice or product failed. Most tech firms need both, plus employers' liability if they have staff.

Will it cover a project that overran or a bug we shipped?

If a client alleges your delay, defect or bug caused them financial loss, that is exactly the kind of allegation tech PI is built to defend. Cover applies to the allegation and defence costs — you do not have to be found liable for the policy to respond, but deliberate or dishonest acts are excluded.

Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This guide is general information, not advice on a specific policy or a substitute for your policy wording.