What Is Technology Errors and Omissions Insurance for a Digital Health Company?

Technology errors and omissions insurance covers a digital health company when its software or technology service fails to perform as promised and a customer suffers a loss. It is not the same product as professional liability, and digital health founders conflate the two constantly. Tech E&O answers a failure in the technology. Professional liability answers a failure in professional judgment, including clinical decision support. A platform that does both, and most do, needs both, because a single policy written for one will not answer a claim framed around the other.

What Technology E&O Covers

Tech E&O responds to a third-party claim that your software or technology service failed and caused financial harm: an outage that cost a customer, a defect that corrupted data, a feature that did not do what it was sold to do, an integration that quietly broke. The injury it contemplates is economic, the customer’s loss flowing from the technology not performing. Standard Tech E&O forms also tend to carry media liability and intellectual property defense components. What many legacy forms also carry is a bodily injury exclusion, which makes sense for ordinary software but becomes a problem for a health platform, where a software failure can lead to patient harm rather than just a financial loss.

Where Professional Liability Is Different

Professional liability answers a different allegation: that your professional judgment, or the clinical function your product performs, fell short of the standard a user was led to expect. For a digital health company that line matters the moment the product influences a care decision, the reliance-on-the-output trigger behind a professional liability claim. A symptom checker that misguides, a monitoring tool that misses an alert, a decision-support feature that recommends the wrong step, these are professional liability facts, not pure technology-failure facts, even though software is the medium. The claim is about the quality of the judgment the product delivered, and a Tech E&O policy built for economic loss may not reach it, especially where bodily injury is involved.

Why a Digital Health Company Usually Needs Both

The reason both lines belong in the program is that one incident can raise both questions, and they answer different facts. A platform outage that costs a customer is a Tech E&O claim. A flawed clinical recommendation that harms a patient is a professional liability claim. A single event, say a software defect that produces a wrong clinical output a clinician relies on, can trigger both at once, and that overlap is exactly where coverage gaps form, the same seam mapped in Tech E&O versus products liability for SaMD. When the two lines are not coordinated, each can be written to assume the other responds first, and the claim falls into the space between them.

This is the same coordination logic a device company faces between errors and omissions and the rest of its program: match each policy to the actual function, then check that they meet in the middle. Cyber sits alongside both and answers a third thing, the loss or exposure of data, which is why a data-holding platform also needs cyber liability written for how it handles health data. Payors may require analytics E&O specifically, covered in what payor contracts require from digital health companies. General liability is not the answer to patient harm from the product, covered in does general liability cover a patient injury at your digital health company.

What to Put in Place

Start from what the product actually does. If it performs a technology service, Tech E&O belongs in the program. If it also influences a clinical decision, professional liability written to respond to that exposure belongs alongside it, and the bodily injury question on the Tech E&O form should be addressed directly rather than left to a default exclusion. Confirm the two policies are coordinated so a mixed claim does not fall into a gap, and revisit the structure as the product adds clinical features, because the function tends to expand faster than the policy renews. The actual-limits question (what number meets the contracts and the defense reality) is covered in how much professional liability a digital health company actually needs.

Before your next renewal, map each function the platform performs to the policy that would answer if it failed, and confirm there is no seam where the technology wording stops and the clinical exposure begins. A specialty review through Tower Street Insurance can pressure-test that mapping against how these claims are actually argued.