Short answer
The technology E&O vs professional liability question comes down to what your company delivers. Technology E&O is built for software failures, data loss and missed delivery. Professional liability is built for advice, reviews and reports that turn out wrong. An AEC software company that also reviews documents or delivers findings clients rely on may need both, or a combined form, depending on the policy wording.
Technology E&O vs professional liability: two policies built for two kinds of mistakes
Technology E&O responds when the product does not do what it should. The software fails, data is lost, delivery runs late, or the platform does not perform as promised.
Professional liability responds when your advice, review or report is wrong and a client loses money because they relied on it. The mistake sits in the judgment, not in the code.
Policy wording varies by carrier, so both descriptions are general. Your actual form, exclusions and underwriting decide what applies.
Where AEC tech companies blur the line
Most AEC software companies start with a clear product. Over time, services grow around it, and the line between software and advice gets harder to see. Three situations come up often:
- Platforms that also review or report. The software reviews documents, flags risks or reports progress, and clients treat the output as a finding.
- Implementation and consulting teams. Staff build schedules, set up models or advise clients on the results.
- Licensed staff who check output. An architect or engineer on your team reviews or signs off on what the platform produces.
In each case, a client may rely on the output the way they would rely on an architect’s or engineer’s work. A claim over that reliance may not look like a software failure to a carrier.
The carve-out to look for in a tech E&O policy
Many technology forms exclude work performed in the capacity of an architect, engineer or surveyor. The wording differs, but the effect is similar. If a claim arises from services that look like design or professional engineering work, the technology policy may not respond.
Review and advisory work can fall in between. A report that flags structural risks, for example, may be viewed by one carrier as a software output and by another as a professional service. Read the exclusions and the definition of covered services before assuming the gap is closed.
Three ways companies solve the gap
Companies that deliver both software and advisory work usually handle it in one of three ways:
- A combined technology and professional form. One policy written to cover both types of work.
- Two policies written to fit together. A technology E&O policy and a professional liability policy, placed so the definitions and exclusions do not leave a gap between them.
- Written carrier confirmation. For services that sit in between, ask the carrier to confirm in writing how it treats them.
The right choice depends on how much of your revenue comes from services and how much clients rely on the findings.
What to have ready for the application
Underwriters price and define coverage based on how you describe the business. Have these details ready:
- Your revenue split between subscriptions, services and consulting
- Who relies on your output
- Who makes final decisions based on it
- Which staff hold professional licenses
- Where client data lives
Accurate answers reduce the risk of a coverage question later.
Real-world example
An AEC software company sells a platform that checks drawing sets for code issues. It also offers a paid review service where an in-house engineer prepares a report on each project.
A client relies on one of those reports, misses a problem and claims a financial loss. The company’s technology E&O policy excludes work performed in the capacity of an engineer. The carrier points to that exclusion, and the company learns the review service was never covered.
If the company had disclosed the service and placed a combined form or a second policy, the claim would have been reviewed under wording that fit the work. Whether any policy responds still depends on its terms, conditions and exclusions.
What to check
- Does your technology policy exclude work performed as an architect, engineer or surveyor?
- Does your application describe every review, report and consulting service you deliver?
- Do your licensed staff review or sign off on output, and does the policy recognize that?
- Do your two policies, if you have two, define covered services in a way that leaves no gap?
- Do your contracts and disclaimers match the services you actually perform?
Related questions
Can one policy cover the software and the consulting?
Sometimes. Some carriers write a combined form, while others require two policies that fit together. Availability depends on the carrier and your operations.
Does our disclaimer that outputs are advisory protect us?
A disclaimer helps set expectations with clients. It does not stop a client who relied on the output from bringing a claim, so it works best alongside the right coverage.
Do we still need cyber liability?
If you host client documents or data, usually yes. Cyber exposure is separate from both technology E&O and professional liability, and each policy responds to different problems.