Commercial insurance for tech companies

Technology companies — software startups, SaaS businesses, IT service providers, app developers, and managed service providers — have a distinct commercial insurance profile. Their most significant exposures are often non-physical: intellectual property claims, data breaches, software errors, and governance failures. Yet many tech founders buy a standard GL policy and assume they're covered. They're not.

The tech company coverage gap

The standard GL policy covers bodily injury and property damage — physical events. The most common claims against tech companies are not physical: a software bug that causes a client to lose data, a security breach that exposes customer information, or an AI recommendation that leads to a bad business decision. None of these are GL claims. Without technology E&O and cyber coverage, a tech company has almost no protection for its most significant exposures.

The tech company coverage stack

• Technology E&O (professional liability) — covers claims arising from errors in software, systems, or IT services provided to clients. If your software doesn't work as promised and a client loses money as a result, tech E&O responds. This is the most important coverage for software and IT companies and is frequently purchased as a combined tech E&O/cyber policy.
• Cyber liability — covers first-party (the company's own) and third-party (client-related) losses from a data breach or cyberattack. For tech companies that hold client data, ransomware, or authentication credentials, cyber coverage is critical. See our cyber liability guide.
• General liability — still needed even for pure software companies. If a visitor trips at your office, if you accidentally damage a client's property during an on-site visit, or if your marketing copy infringes a competitor's trademark (advertising injury is a GL coverage), GL responds.
• Directors and officers (D&O) — venture-backed tech companies almost always need D&O insurance. Investors — especially institutional VCs — will require it. Investor disputes, securities claims, and governance challenges are real risks for venture-backed companies.
• EPLI — tech companies in competitive hiring markets face significant employment practice risks: stock option disputes, remote work policy claims, pay equity issues. EPLI coverage becomes more important as headcount grows.
• IP infringement coverage — patent trolls are a real risk for SaaS companies. Some tech E&O policies include IP infringement coverage; others offer it as an endorsement. Worth specifically asking about for software product companies.

Investor-required coverage

Most institutional venture capital investors (Series A and beyond) require portfolio companies to carry specific coverages as a condition of investment. Common requirements include:

• D&O with minimum limits (often $2M–$5M)
• Tech E&O with minimum limits
• Cyber liability
• Workers compensation if employees are in a state that requires it

Founders who receive a term sheet for the first time are often surprised by these requirements. Agents who are already advising early-stage companies on their insurance programs are positioned to handle these conversations before the founder is in a panic. Building tech company relationships early — before the first funding round — creates long-term accounts that grow significantly as the company scales.

Tech underwriting factors

Underwriters evaluate tech companies on the services or software provided and the client base it serves. Higher-risk tech accounts include:

• Companies that process healthcare data (HIPAA) or financial data (PCI)
• Companies where clients depend on the software for critical operations (e.g., financial trading platforms, medical diagnosis tools)
• Companies with large numbers of customer records (data breach exposure scales with record count)
• Companies that have already experienced a breach or significant software failure

Capturing the company's technical stack, security practices, client contract terms, and prior incidents during client intake gives you what you need to market the account effectively to tech-focused carriers.

Tech company intake that covers every exposure

AgencyAssist captures product type, data handled, client contracts, and security controls — everything tech underwriters need.