Question 1

What insurance does a SaaS company actually need?

Accepted Answer

Most software companies start with technology errors & omissions (Tech E&O) and cyber liability, since those two respond to the claims that actually come up — a product failure or a security incident. General liability is usually still needed for lease and contract compliance even without physical operations, and funded companies with a board typically add directors & officers (D&O) coverage.

Question 2

Do we need insurance if we're pre-revenue or pre-seed?

Accepted Answer

It depends on your contracts and investors. Many pre-seed teams delay coverage until they sign their first enterprise customer or close a priced round, since that's usually when a contract, vendor questionnaire, or term sheet first requires proof of it. If you're already handling customer data or signing MSAs, it's worth pricing out earlier rather than scrambling when a deal is on the line.

Question 3

Does general liability cover a data breach?

Accepted Answer

No. General liability responds to bodily injury and property damage claims — it does not cover a data breach, ransomware event, or the notification and legal costs that follow one. That requires a dedicated cyber liability policy.

Question 4

What's the difference between Tech E&O and cyber liability?

Accepted Answer

Tech E&O responds to performance failures — your software didn't do what it was supposed to and it cost a client money. Cyber liability responds to security failures — a breach, ransomware attack, or unauthorized access to data. Many software companies carry both, since a single incident (like an attack that also causes an outage) can touch both policies.

Question 5

We're SOC 2 compliant — do we still need cyber insurance?

Accepted Answer

Yes. SOC 2 documents that your security controls exist and were tested over an audit period; it doesn't cover the financial cost of an incident if one happens anyway. A current SOC 2 report can make cyber insurance underwriting faster since much of the same control information is being evaluated, but it isn't a substitute for the policy itself.

Question 6

What does a typical underwriting questionnaire ask?

Accepted Answer

Expect questions about multi-factor authentication, data encryption, backup and recovery practices, employee security training, incident-response planning, and how you manage vendor/subprocessor risk. Having your SOC 2 report, security policies, and incident-response plan organized ahead of time speeds up the process considerably.

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