Insurance for Tech Companies and Startups
Startups usually buy insurance for the first time because someone asks for it: a lead investor at the priced round, an enterprise customer in procurement, or a landlord signing the first real lease. Buying it well means knowing what each of those people will require next, and building a program that grows with the company rather than being rebuilt every round.
What usually goes wrong
- Software failures or outages that cost customers money
- Data breaches and security incidents
- Investor claims against founders and the board
- Employment claims as headcount grows quickly
- Sale or merger claims after an exit
The coverage we typically build
- Professional Liability (E&O)Claims that your advice, work, or service cost a client money. Excluded from every BOP and GL policy.Details
- Cyber LiabilityRansomware, data breaches, and wire fraud. The claim small businesses are now most likely to file.Details
- Directors & OfficersPersonal protection for founders, directors, and officers when management decisions are challenged.Details
- Employment Practices LiabilityWrongful termination, discrimination, harassment, and retaliation claims from employees and applicants.Details
- Business Owners PolicyProperty, liability, and lost income bundled into one policy. The right starting point for most small businesses.Details
Tech E&O and cyber are often written together on one policy. Enterprise customers typically ask for both in the same insurance clause.
The gap we see most
Founders plan the exit carefully and forget the insurance. When a company is sold, its D&O coverage ends. The tail policy that protects the former board and officers for years after closing has to be bought before closing. Trella's personal side also handles what changes for the founder after liquidity, when a larger net worth means larger personal liability limits.
For founders and employees with RSUs or options, see the equity-wealthy household's insurance guide on Trella Insurance.
Stories from technology & startups
Illustrative stories: what each business came in for, and what the review found.
A Hardware Startup's First Retail Order Came With an Insurance Requirement
A smart home device startup landed a national retailer. The vendor agreement required products liability coverage the founders had never bought, and the review found two more gaps that investors would ask about next.
GLD&OPropertyTechnologyA Tech Company Went From 25 to 110 Employees in a Year. Its EPLI Stayed at 25.
A venture-backed software company quadrupled its headcount after a funding round, then went through its first layoff. The review found an EPLI policy sized for a startup, and remote employees in states it had never considered.
EPLID&OCyberTechnologyAn App Studio's Enterprise Client Wanted Tech E&O. The Studio Had Never Heard of It.
A small app development shop won its first enterprise contract, then hit a procurement wall: $2 million of technology errors and omissions plus cyber coverage, due before signature.
E&OCyberEPLITechnologyThe Founder Sold His Company. The D&O Policy Ended at Closing.
A founder negotiating the sale of his company had tax advisors, lawyers, and bankers. Nobody had mentioned that the company's D&O coverage would end at closing, right when claims from the deal were most likely.
D&OEPLICyberTechnologyThe Term Sheet Said D&O. The Founders Had Two Weeks.
Two founders were closing a seed round with a new outside board member. The term sheet required directors and officers coverage before closing, and the review found two other policies their first enterprise customer would soon ask for.
D&OCyberE&OTechnologyWhen a Managed IT Provider Gets Breached, Every Client Gets Breached
An MSP supporting forty small businesses had a cyber policy sized for its own office. The review found that its real exposure was a single compromised tool that touches every client at once.
CyberE&OUmbrellaCommon questions
What insurance do investors require from a startup?
D&O is the standard requirement once there is an outside board member. Investors may also ask about cyber, EPLI, and general liability as the company grows.
What do enterprise customers look for in a SaaS vendor's insurance?
Typically technology E&O and cyber, often at $2 to $5 million, plus general liability. Procurement will send a security questionnaire alongside the insurance requirement.
Insurance for technology & startups, reviewed line by line.
Send us what you have. We review it line by line against your leases and contracts, and tell you plainly what is missing. Free, and no obligation.