Industry Guide

Commercial Insurance for Tech Companies and Software Businesses

Technology companies have a different commercial insurance profile than traditional businesses. Their primary exposures are not premises liability or property damage — they are professional liability for software failures, cyber liability for data breaches, and D&O for investor-related disputes. An agent who understands the tech risk profile can build a complete program that actually covers what could go wrong.

Coverages tech companies need

Technology E&O / Professional Liability
Specialty application
The most important coverage for tech companies. Covers claims that a product or service failed to perform as promised, caused a client financial loss, or that professional advice or services were negligent. This is written on a claims-made basis.
Cyber Liability
Specialty application
Tech companies are both high-value targets and hold customer data. Cyber covers breach response, data recovery, business income loss from outages, and third-party claims from customers whose data was compromised. Often bundled with tech E&O.
Commercial General Liability
ACORD 125 + 126
Covers premises liability, bodily injury, and property damage claims. Required by landlords and clients. Does NOT cover professional services or cyber claims — both need separate policies.
Directors & Officers (D&O)
Specialty application
Critical for VC-backed companies. Investors can sue board members for decisions that affect company value. D&O covers defense costs and judgments against directors and officers. Early-stage companies often get pressure from investors to carry D&O.
Workers Compensation
ACORD 125 + 130
Required for all employees. Most tech employees are clerical/office workers (lower class code rates), but the WC obligation exists regardless of industry.
Commercial Property / Business Personal Property
ACORD 125 + 140
Covers office equipment, servers, computers, and other hardware. Many tech companies lease their space and only need BPP coverage for equipment and tenant improvements.

Tech E&O vs. cyber: what each covers

Technology professional liability (tech E&O) and cyber liability are often confused — and often bundled by carriers, which adds to the confusion. They cover fundamentally different scenarios:

Tech E&O covers: A client's software product doesn't work as promised and the client suffers financial losses. A SaaS platform goes down and clients can't access their data. A developer delivers code with bugs that cause a client's system to fail. These are professional negligence claims — the tech company failed to deliver what they were paid to deliver.

Cyber covers: A breach of the company's systems exposes customer data. A ransomware attack locks the company out of its systems. A social engineering attack results in fraudulent wire transfers. These are security events — not professional failures, but unauthorized access to systems or data.

Contract requirements for tech companies

Enterprise clients, SaaS customers, and investors routinely require tech companies to carry specific insurance limits as a condition of doing business. Common requirements include:

$1M to $5M per occurrence in tech E&O / professional liability — $2M minimum per occurrence in cyber liability — $1M per occurrence in commercial general liability. Enterprise SaaS deals, government contracts, and financial services clients often require higher limits. Agents who understand these requirements can help tech clients structure their coverage to win contracts rather than lose them to inadequate insurance.

Key underwriting questions for tech accounts

1

What does the software or technology product do? Who are the customers?

2

Does the company handle or process customer data? What type of data? (PII, financial, healthcare)

3

Is the product or service critical to customers' operations — what happens if it goes down?

4

Does the company provide any professional services alongside the software (consulting, implementation, customization)?

5

Has the company ever received a claim, complaint, or demand related to its technology or services?

6

What are the annual revenues, and how much comes from SaaS/subscription vs. professional services?

7

Does the company have VC or private equity backing? Are there outside investors or board members?

8

Where are the company's customers located? (US only, or international)

9

Does the company use open-source software in its product? Are there any open-source licensing risks?

10

What security controls are in place? (SOC 2, ISO 27001, encryption, access controls, MFA)

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AgencyAssist collects all commercial lines data through a single intake link — GL, property, WC, and cyber. E&O and D&O data is structured for transfer to specialty markets.

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Related

Professional liability (E&O) insuranceCyber liability insuranceEmployment practices liability (EPLI)Tech company insurance — full guideOccurrence vs. claims-made — what agents must know