Tech Business Insurance

Errors and omissions (E&O) insurance, a form of professional liability, covers the cost of defending and settling claims that your tech work caused a client financial harm. That includes disputes over software that didn't perform as promised, advice that led to a bad outcome and services that fell short of contract requirements. For tech businesses, E&O is often the first coverage clients ask for because the financial exposure tied to software failures and system dependencies is high.

Common claim scenarios

• A client claims a bug in your custom software caused billing errors that cost them revenue
• A SaaS product fails to deliver a feature specified in the contract, and the client sues for the cost of switching platforms
• A consultant's system architecture recommendation leads to a failed implementation, and the client seeks damages
• A client holds a developer responsible for downstream business losses after a missed project deadline

Who needs it

• Any tech business that delivers software, code or technical services under a client contract
• Developers and consultants whose work is tied to client revenue, operations or business-critical systems

When you need it

• When a client contract requires proof of E&O coverage before work begins
• When you move from informal project work to signed contracts with defined deliverables and timelines

How much you likely need

• $1 million per claim is a common starting point for small tech firms and independent consultants
• Enterprise clients and government contracts often require $2 million to $5 million in coverage

When to adjust your limits

• Move above $1 million if your contracts involve business-critical systems where a failure could trigger large downstream losses
• Enterprise clients in financial services, healthcare or government typically require higher limits as a contract condition
• A solo developer on small fixed-scope projects can start at $500,000 if contracts are limited in scope and client size

Cyber liability insurance covers the costs that follow a data breach or cyberattack, including notification expenses, legal defense, regulatory fines and recovery costs. Tech businesses carry more cyber exposure than most because they store sensitive client data, maintain access to client systems and build the software infrastructure other businesses depend on. Because your systems connect to your clients', a breach on your end can generate claims from multiple directions at once.

Common claim scenarios

• A ransomware attack encrypts your systems, and a client sues for losses tied to the resulting service disruption
• A breach in your cloud storage exposes personal data belonging to your clients' customers, triggering notification and regulatory costs
• A threat actor uses compromised credentials from your system to access a client's network, and the client holds you liable
• A phishing attack on your team leads to unauthorized access to source code and a client's proprietary data

Who needs it

• Tech businesses that store, transmit or process sensitive client data as part of their core service
• Any developer or managed services provider with persistent access to client systems or infrastructure

When you need it

• When client contracts require cyber coverage as a condition of engagement
• Your business also needs it once it handles client data, source code or system credentials that would create liability if compromised

How much you likely need

• $1 million in coverage is a common starting point for small to mid-size tech businesses
• Managed services providers and cloud-based platforms handling large volumes of client data often need $2 million or more

When to adjust your limits

• Move higher if your business has access to multiple client environments, since a single breach can trigger claims across several clients simultaneously
• Healthcare and financial services clients typically require higher cyber limits as a contract condition
• A solo developer with limited data storage and no persistent client system access can start at $500,000

General liability insurance covers third-party claims for bodily injury, property damage and personal and advertising injury. The last category includes claims tied to how your business markets itself or talks about competitors. General liability exposure is lower for tech businesses than for those in trades or construction, but it doesn't disappear entirely. Client meetings, office visits, demo events and on-site work create enough third-party exposure that most landlords and clients require proof of GL coverage before you can sign.

Common claim scenarios

• A client visits your office and injures themselves in a slip-and-fall
• An employee damages a client's hardware while working on-site during a system installation
• A competitor claims your marketing materials misrepresented their product, triggering a personal and advertising injury claim
• A visitor to your demo booth at a tech conference damages their property and holds your business responsible

Who needs it

• Tech businesses that meet with clients in person, host on-site installations or operate from a shared or leased office space
• IT and software firms with staff working at client facilities, data centers or third-party locations 

When you need it

• When a commercial lease for office or co-working space requires proof of coverage before move-in
• When a client contracts for on-site implementation, hardware setup or technical support, a certificate of insurance

How much you likely need

• $1 million per occurrence and $2 million aggregate is the standard starting point for most tech businesses
• Many client contracts specify these limits as a minimum requirement

When to adjust your limits

• Move higher if you regularly work on-site at enterprise client locations with greater property damage exposure
• Large enterprise or government contracts often require $2 million per occurrence or higher
• A fully remote tech business with no client-facing office and no on-site work can often stay within standard limits

Workers' compensation insurance covers medical expenses and lost wages for employees injured or made ill by their work. Most tech business owners assume workers' comp is a formality. It isn't. Repetitive strain injuries, stress-related illness from high-pressure development cycles and injuries sustained traveling to client sites all fall within the scope of a workers' comp claim.

Common claim scenarios

• A software developer files a workers' comp claim for a repetitive strain injury caused by extended keyboard use
• An employee traveling to a client site for an on-site implementation is injured in a car accident
• A data center technician injures their back lifting server equipment during a hardware installation
• A QA engineer develops a stress-related illness tied to sustained crunch periods before a product launch

Who needs it

• Tech companies with at least one W-2 employee, including remote engineers, support staff and operations roles
• Startups scaling their engineering or product teams quickly, where headcount changes outpace policy reviews

When you need it

• When you hire your first W-2 engineer, developer or full-time staff member in a state that mandates coverage
• Contractors working exclusively on your codebase or infrastructure may also trigger coverage requirements if your state reclassifies them as employees

How much you likely need

• Workers' comp limits are set by state law, so coverage amounts are determined by where your employees work
• Tech businesses with remote staff in multiple states need a policy that meets each state's requirements separately

When to adjust your limits

• Add coverage for additional states as your team grows and employees relocate or work remotely from new locations
• Review your classification codes when your business adds new service lines, since developers, IT technicians and support staff often carry different rates
• A solo founder or single-member LLC with no W-2 employees doesn't need workers' comp in most states, but the exemption rules vary and are worth confirming

Commercial property insurance covers the physical assets your tech business owns or leases, including office space, hardware, servers, networking equipment and the devices your team uses to build and deliver your products. Tech businesses tend to concentrate a lot of value in a small physical footprint, and a single fire, theft or burst pipe can put tens of thousands of dollars in hardware out of commission at once.

Common claim scenarios

• A fire in your office damages servers and networking equipment, forcing an unplanned hardware replacement
• A theft of laptops and development workstations from your office disrupts an active product sprint
• A burst pipe floods your server room and destroys on-premise hardware and storage equipment
• A power surge damages networking equipment and workstations across your office

Who needs it

• Tech businesses that own or lease office space and maintain on-premise hardware, servers or networking infrastructure
• Companies running high-value development or server equipment that would be costly to replace without insurance

When you need it

• When you sign a commercial lease that requires tenants to carry property coverage
• Your business also needs it once it owns or finances hardware, servers or equipment that represents a material replacement cost

How much you likely need

• Start with a limit that reflects the full replacement cost of your hardware, servers, networking equipment and office contents
• Tech businesses with on-premise server infrastructure or specialized development equipment often need higher limits than a standard office-based business

When to adjust your limits

• Increase your limit when you add server capacity, upgrade workstations or expand your physical office footprint
• Remote tech teams that use personally owned devices and co-working spaces need less coverage than an office-based business with dedicated hardware
• Review your limit annually if your hardware inventory changes frequently, since underinsuring high-value equipment is a common gap for fast-growing tech teams