Technology and Startup Insurance
Technology and startup insurance is an important policy that protects technology companies and startups who are rising fast in Canada and are expected to keep doing so over the coming years.
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Insurance for technology & startups
Canada’s startup scene has been growing exponentially in the last few years – in fact, about 95,000 start-ups are founded each year. Technology startups are particularly popular ventures as their services can be utilized by a variety of other businesses.
As a startup owner, many industries rely on your expertise to improve their offerings. Whether you provide a niche service or have a broad focus that can be utilized in various ways, there is always a risk when it comes to offering tech services and expertise.
Your startup business has unique risks. With over fifty partners, we’ve helped technology startups across industries protect their businesses with insurance policies tailored to meet their specific needs.
At 2autoinsurance, we’re on a mission to make insurance as accessible as possible. Read our guide to help you navigate the basics of technology startup insurance for your practice.
What is technology and startup insurance?
When you own a startup, you could be held liable for almost any negative impact your services have on a business. Technology and Startup Insurance protects technology companies and startups from many risks that they face, including but not limited to cybersecurity risks, damage caused by their product/software to third parties, errors or omissions in service.
What does it cover?
Different startups have different risks; for example, a financial technology startup won’t require the same type of coverage as a technology startup specializing in marketing.
We believe a comprehensive policy for your business should cover the risks you are most likely to face. Those risks will vary by service, industry, and product; however, the following core coverages apply to most business owners:
- Errors and Omissions Insurance (E&O): As a technology professional, Errors and Omissions Insurance is essential to your business’s survival. Also known as Professional Liability Insurance, E&O can protect startups against claims alleging financial loss due to a service you provided, as well as lawsuits alleging negligence, misconduct, and failure to deliver services as promised.
- Cyber Liability Insurance: Your business is based around your technological offerings, so Cyber Liability is important coverage to have. Cyber Liability Insurance covers costs associated with cybercrime involving your technology systems and customer data, such as loss of income, notification costs, or data infrastructure repair.
- Commercial General Liability Insurance (CGL): Also known as “slip-and-fall-insurance,” Commercial General Liability Insurance can protect technology startups against common claims or lawsuits alleging third-party bodily injury, property damage, false advertising, and libel/slander. Should you be sued, CGL may cover legal defence costs, regardless of the lawsuit’s outcome.
- Commercial Property Insurance: Commercial Property Insurance provides financial coverage for physical loss or damage to your property and its physical contents due to an external disaster, such as a fire, theft, or vandalism. This may include coverage for electronics, equipment, and inventory that you need for your business.
- Legal Expense Insurance: Legal Expense Insurance provides access to general legal advice with an experienced lawyer, as well as coverage for legal expenses incurred throughout the legal process. This type of insurance policy may cover legal costs associated with defending your legal rights relating to employment disputes, debt recovery, contract disputes, or tax protection.
Who needs it?
Any individual or business providing technological services or advice should protect their business with a Technology and Startup Insurance policy package.
We’ve insured technology professionals & startups practicing in a range of sectors, including:
- Software Developers
- IT Consultants
- Computer Installation and Repair
- Mobile Apps
- SaaS Providers
How much does it cost?
Every business is unique, and insurance requirements will vary by size and industry. Insurance for technology startups costs approximately $600 for a combined Errors and Omissions Insurance policy ($100K limit) and CGL policy with a $1,000,000 limit.
When you fill out our online application, we will ask your business questions to understand your requirements better. The following factors are taken into consideration when determining the best policy options for your practice:
- Annual revenue
- Types of products created
- Value of assets and liabilities
- Industry experience
- Holding client/customer data
- Office location
To make sure you get the right coverage and cost for your businesses, we’ve partnered with over fifty insurance providers to offer you different options that will work for you.
Common claims scenarios
Problem: Your FinTech startup company is building accounting software for a client. While they’re using it, it crashes, and they lose years’ worth of financial information, causing severe interruption to their business operations for weeks.
Outcome: The client sues you for delivering a product that was not up to the required specifications and causing financial loss. Your Professional Liability Insurance could cover the legal costs totaling $90,000.
Problem: A prospective client visits your office to talk about your offerings. While on your premises, they slip on spilt coffee, seriously injuring their arm.
Outcome: The client files a personal injury lawsuit against your business. Your Commercial General Liability Insurance could cover the medical expenses and legal fees, totaling $10,000.
Problem: You’re developing online marketing software for a client to share with them in the coming weeks. While still in the development stage, the software is hacked, and your client’s information is compromised.
Outcome: Your Cyber Liability Insurance could cover the cost to repair the software and cover legal fees, totaling $85,000.
Frequently asked questions
What is the difference between Technology Insurance and Tech E&O Insurance?
Technology and Startup Insurance is a specialized policy for technology companies (e.g. Software Developers, IT Staffing, SaaS providers, E-commerce) that includes coverages specially curated to protect technology companies from the unique risks they face. Tech E&O is a coverage that’s usually included within Technology and Startup Insurance.
Is Technology Insurance the same as Cyber Liability Insurance?
Technology Insurance could broadly include several different insurance policies, including Cyber Insurance. Cyber Liability insurance provides coverage for damages due to electronic incidents. It is usually included in a Technology Insurance policy alongside additional coverages such as general liability, professional liability, legal expense insurance, etc.
Are Legal Expenses covered under my Technology Insurance policy?
You may choose to add Legal Expense coverage to your Technology Insurance policy (and we recommend that you do). Legal Expense coverage provides access to a lawyer for immediate legal advice on any business-related matter and coverage for legal expenses for the following: Contract Disputes, Employment Disputes, Criminal Defence, Property Disputes, Personal Injury, and Tax Disputes.
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As a startup, you’ve dedicated your career to helping society thrive with your tech expertise; you deserve a broker dedicated to providing you with the same level of care so you can succeed, too.
At 2autoinsurance, we simplify the process of getting insurance so that you get the coverage you need quickly and easily! Start your online application today to get a free quote in 5 minutes.