The tech startup's first insurance conversation

If you just raised a round or signed your first big client, someone's about to ask for proof of insurance. Here's what Peninsula tech startups actually need — from seed stage through Series A — what to buy first, what to skip for now, and what to revisit at each stage.

Most Tech Startups Fall Into One of Two Camps

Both are risky. Here's what actually matters for a Peninsula tech company.

The Baseline: What Every Tech Startup Needs

General Liability (GL)

Even if you're fully remote and your product is digital, you need GL. Contracts require it. Investors expect it. And if a client visits your office (or your WeWork) and gets hurt, GL covers it.

Professional Liability / Errors & Omissions (E&O)

This is the big one for tech. If your software causes a client to lose data, revenue, or functionality — they're going to look to you. E&O covers claims arising from your professional services and product performance.

If you sell software, provide consulting, manage data, or build anything that other businesses rely on — E&O is not optional.

Cyber Liability

You're a tech company. You handle data. You probably have user accounts, APIs, cloud infrastructure, and code repositories. A breach, a hack, or a ransomware event hits different when tech is your product.

Cyber covers breach notification, forensic investigation, business interruption from a cyber event, and lawsuits from affected parties.

As You Grow: What Scales With You

Directors & Officers (D&O)

Once you take outside investment, D&O becomes essential. It protects your founders and board members from claims related to decisions they make on behalf of the company — mismanagement allegations, breach of fiduciary duty, investor lawsuits.

Most VCs will require D&O as a condition of funding.

Employment Practices Liability (EPLI)

The moment you have employees, you have EPLI exposure. Wrongful termination, discrimination, harassment claims — California is one of the most aggressive states for employment law. Tech companies with rapid hiring and firing cycles are especially exposed.

Workers' Compensation

Required in California if you have employees. Yes, even if everyone works from home. Yes, even if no one does physical labor. A repetitive stress injury from typing is still a workers' comp claim.

Key Person Insurance

If your startup depends on one or two founders (and it almost certainly does), key person life insurance protects the company if something happens to them. Some investors require it.

Four Common Mistakes I See From Tech Startups

"We're pre-revenue, so we don't need insurance."

You might not need much yet. But the moment you sign a contract, take investment, or hire someone, you have exposure.

"Our investor told us to just get a BOP."

A Business Owner's Policy (BOP) doesn't include E&O, cyber, D&O, or EPLI. It's a starting point, not a program.

"We got the cheapest E&O policy online."

Not all E&O is built the same. Tech E&O should cover software performance, data handling, and SaaS-specific risks. A generic professional liability policy designed for consultants won't cover a product failure claim.

"We'll figure out D&O when we raise."

D&O should be in place before you close a round. Retroactive coverage is harder to get and more expensive. Get it while things are clean.

What a Solid Tech Startup Insurance Program Looks Like

For a Peninsula-based SaaS company with 5–20 employees:

Total cost? For a company at this stage, you're probably looking at $15,000–$40,000/year depending on your revenue, headcount, and risk profile.

Key Takeaways

What to Do Next

If you're a tech founder on the Peninsula and you're not sure what you need (or whether what you have is enough), send me:

I'll tell you what you need, what you don't, and what it'll roughly cost.

Zach Nadler is a 4th-generation insurance broker at Nadler Insurance in San Carlos, CA. Let's build your coverage program →