Short answer
When you describe operations on an insurance application, the carrier decides what it is covering based on your wording. A vague line such as “software company” can leave advisory, review or consulting work outside the policy. A clear description separates the platform from the services, says who relies on the output and states what you do not do. Policy wording and underwriting still decide what applies.
Underwriters cover what you describe
A carrier prices and writes coverage from the application. The description of operations tells the underwriter which services you sell, who uses them and how much risk sits behind them.
If a service never appears on the application, the carrier may not have priced it or intended to cover it. That gap often surfaces only when a claim arrives. Our article on [why your professional liability application matters at renewal] explains how those answers get used later.
Separate the platform from the services
Many AEC tech companies sell more than software. Break the business into its parts and give revenue for each one:
- Subscriptions. The platform itself.
- Implementation. Setup, model configuration and onboarding.
- Consulting. Advice on schedules, risk or results.
- Review. Document, plan or contract review delivered as a report.
- Expert support. Staff who explain, confirm or sign off on output.
A revenue split shows the carrier how much of the business is technology and how much is advisory. That split often decides which policy form fits. Our article on [technology E&O vs professional liability for AEC software companies] covers how carriers draw that line.
Say who relies on your output and for what
Describe who acts on your work and what decision follows. An owner approving a pay application, a design firm submitting drawings and a contractor meeting a notice deadline all rely on output in different ways.
The more a client’s financial decision rests on your work, the more closely a carrier may look at it. Naming those reliance points up front gives the underwriter a realistic picture. It also helps you see whether your coverage fits that exposure.
Say what you do not do
A short statement of exclusions clarifies scope, as long as it is accurate. For example:
“The company provides construction document management and coordination software with related advisory services. It does not provide architectural or engineering design, certify or approve plans, or direct construction.”
Use this kind of language only if it is true. Our article on [why advisory construction tech still gets sued] explains why a statement like this helps define your role without preventing every claim.
Ask for written confirmation on the gray areas
Some services sit between technology and professional work. Name each one and ask the carrier to confirm in writing how it treats them. A request might read: “Please confirm that our paid plan review reports are covered under this policy.”
A written answer beats an assumption. If the carrier declines or limits a service, you learn that before a claim and can look for a second policy or a combined form.
Update it when the business changes
A description that was accurate at renewal can go stale. New service lines, new customer types or new AI features can change the risk mid-term.
Report material changes to your broker when they happen, instead of waiting for the next renewal. Whether a policy requires notice depends on its terms, so ask your broker how yours reads.
Example: the vague description
A construction software company applies for technology E&O and describes itself as “a software company.” It also sells a paid review service where an in-house engineer prepares reports on client drawings.
A client relies on one report, misses an issue and claims a financial loss. The carrier points to the application, which never mentioned review services, and questions whether they were ever part of the coverage.
If the company had described the review service and asked for written confirmation, the carrier’s position would have been clear before the claim. This example is hypothetical. Coverage depends on the policy terms, exclusions and underwriting.
What to check
- Does your description list every service and its share of revenue?
- Does it say who relies on your output and for what decision?
- Does it state what you do not do, and is that accurate?
- Have you asked the carrier to confirm gray-area services in writing?
- Do you have a process for reporting new services during the policy term?
Related questions
Can a better description lower my premium?
It can help the carrier price your real risk, which sometimes improves the quote. The main goal is coverage that fits what you deliver.
What if we add a consulting service mid-year?
Tell your broker. Unreported services are a common source of coverage problems, and your policy terms may address notice.
Should we list things we do not do?
Yes, if the statements are accurate. They clarify scope for the underwriter and give both sides a clearer picture of the work.