--- title: "What is the Applicant's primary technology business operations (Software / Hardware / Services)?" url: https://insuranceposture.com/questions/services-and-contracts/applicant-s-primary-technology-business-operations category: "Services and contracts" canonical_key: q_pro_001 evidence_state: attested updated: 2026-08-24 --- # What is the Applicant's primary technology business operations (Software / Hardware / Services)? URL: https://insuranceposture.com/questions/services-and-contracts/applicant-s-primary-technology-business-operations Section: Services and contracts Evidence state: Attested, not tenant-verifiable This answer determines which liability model the underwriter applies, and the three categories fail in very different ways. ## What the carrier is actually asking The carrier is asking whether your primary activity is producing software, supplying hardware, or delivering services. Most technology businesses do more than one, so the question is really about the revenue split. ## Why it is underwritten Software defects propagate to every customer at once. Hardware carries product liability and recall exposure. Services carry professional liability tied to individual engagements. The rating basis and the wording differ, so the classification determines what you are actually buying. ## Where the answer lives in Microsoft 365, Entra ID, and Azure This is a description of your business supported by revenue attribution. | Platform | Where the setting lives | What has to be true | | --- | --- | --- | | Finance | Revenue split across software, hardware, and services | A supportable split rather than an impression. Attested | | Contracts | What customers actually contract for | The contractual characterisation, which sometimes differs from the commercial description | | Delivery | Whether software is hosted by you or installed by the customer | Hosting changes the exposure substantially, because availability becomes your obligation | | Trajectory | Where revenue is shifting | A business moving from licence to hosted service is changing its risk profile | | Policy | The description on the schedule | Consistency with what you describe here | **Hosted software is a service too** A software company that hosts its product has taken on availability and data custody obligations that a licence vendor never had. Describing yourself purely as software understates that, and it is the part most likely to generate a client claim. ## What a defensible yes requires - The primary activity reflects the revenue split. - Secondary activities are disclosed. - Hosting and data custody obligations are described where they exist. - Any significant shift in the mix is mentioned. - The policy schedule description matches. ## How this answer goes wrong A company describes itself as software while a third of revenue comes from implementation consultancy. Professional services claims arise from engagements rather than from the product, and that revenue was not part of the rating basis. ## If this answer turns out to be wrong Technology E&O questions describe what you promised your own clients, and the policy language decides how strictly your description of that is held. Whether anything follows from an inaccuracy depends on materiality, on the policy wording, and on the law of the governing state: [whether an answer is a warranty or a representation](https://insuranceposture.com/glossary/warranty). The other consequence terms are collected in the [glossary](https://insuranceposture.com/glossary). ## Frequently asked ### What if we do all three? Give the split. Carriers handle mixed technology businesses routinely when they can see the proportions. ### Does hosting change the answer? It adds a service dimension with availability obligations. Describe it explicitly. ### Why does the split matter? It determines the rating basis and which wording extensions you need. A misclassification can leave the largest revenue line poorly covered. ### What if the mix is changing? Say so. A business moving toward hosted delivery is worth flagging at the renewal where the shift crosses over. ## Related questions - [Which technology service lines are a significant part of the Applicant's revenue (consulting, MSP/MSSP, development, BPO, QA/testing, IT staffing/project management, telecom/ISP, e-recycling/data destruction, etc.)?](https://insuranceposture.com/questions/services-and-contracts/technology-service-lines-significant-part-applicant-s-revenue) - [Do the Applicant's software products or services address any specific high-exposure activities (IT security, e-commerce, finance/banking, medical/healthcare, media broadcasting/streaming, ERP/CRM/SCM, custom programming)?](https://insuranceposture.com/questions/services-and-contracts/applicant-s-software-products-services-address-specific-high-exposure) - [Does the Applicant provide data processing, storage, or hosting services to third parties?](https://insuranceposture.com/questions/business-profile/applicant-provide-data-processing-storage-hosting-services-third-parties) - [What is the Applicant's industry classification (NAICS / industry select)?](https://insuranceposture.com/questions/governance-and-workforce/applicant-s-industry-classification) --- Insurance Posture by SecValley. https://insuranceposture.com The question library is written in our own wording to reflect the control topics that recur across US cyber application and ransomware supplemental forms. No carrier form is republished. SecValley is not a law firm, an insurance broker, an agent, or a carrier, and holds no producer licence. Nothing here is insurance advice, legal advice, or a coverage determination, and no attorney-client relationship arises from reading it. Statements about what a party to a cited case did, knew, or intended are allegations drawn from court filings and contemporaneous reporting, not findings of fact. Your organization's authorized signer remains responsible for the accuracy of any application. Consult a licensed broker and qualified counsel before binding.