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In the uncertain landscape that has emerged due to the pandemic, navigating the complexities of running a tech startup has become even more challenging. From focusing on Net Revenue Retention to securing investments and understanding legal intricacies, the hurdles are many. Unforeseen events like the SVB crisis only add another layer of complexity. However, the good news is that the right business insurance can offer a safety net, allowing you to concentrate on building a thriving business.

Why Opt for Business Insurance Tailored for Tech?

Issues like data breaches, legal disputes, and service or product failures can severely impact a nascent tech company. This is where specialized business insurance steps in, offering financial safeguards against unexpected setbacks. With the right insurance coverage, you can direct your energy towards scaling your business with confidence.

3 Essential Business Insurance Types for Tech Startups

While each business has its own unique needs and challenges, there are three types of insurance that are universally beneficial for tech startups.

Errors and Omissions Insurance (E&O)

E&O Insurance, or Errors and Omissions Insurance, is a type of professional liability insurance that protects companies, their workers, and other professionals against claims of inadequate work or negligent actions. 

This insurance coverage is particularly important for businesses that provide services or advice to clients. If a client believes that a service or advice has led to a financial loss or other types of damages, they may file a claim against the company. 

E&O Insurance helps to cover the legal fees, settlements, and other costs associated with defending against such a claim.

For Example: If you're in the tech industry, offering products and services to clients, what happens if they don't perform as expected? 

According to a study by Marsh India, E&O claims in the country increased by 20% in 2020 compared to the prior year. Having E&O insurance can protect your client-facing business and enable you to operate more confidently.

Directors and Officers Insurance (D&O)

Directors and Officers Insurance (D&O) is a type of liability insurance specifically designed to protect individuals serving as directors or officers of a company from personal losses in case they are sued for alleged wrongful acts while managing the company. It can also cover the legal fees and other costs the organization may incur as a result of such a suit.

D&O Insurance is particularly important because the personal assets of directors and officers can be at risk in the event of a lawsuit against the company.

These individuals often make decisions that have significant impacts on employees, customers, and shareholders, making them potential targets for legal actions. Claims can come from various stakeholders, including shareholders, employees, competitors, or government agencies.

A report by Willis Towers Watson indicates a significant uptick in D&O lawsuits in India, with cases rising from 29 in 2016 to 63 in 2019. Moreover, SEBI mandates D&O insurance for all listed companies in India. From both a regulatory and business standpoint, D&O insurance is indispensable.

Cybersecurity Insurance

Cybersecurity Insurance, also known as cyber liability or cyber risk insurance, is a specialized insurance coverage designed to protect businesses and organizations from financial losses related to cyber incidents. These incidents can include data breaches, cyberattacks, and other forms of cybercrime that compromise sensitive data or disrupt business operations.

Tech businesses often handle vast amounts of sensitive data, making them prime targets for cyberattacks. Whether you provide a B2B marketplace, SaaS, or any other tech services, it's essential to stay vigilant when it comes to cyberattacks. A PwC India survey revealed that 25% of Indian companies experienced over five cyberattacks in the past year. Given this surge in cyber threats, cybersecurity insurance is essential.

How Much Does It Cost?

Determining insurance premiums involves multiple variables, such as:

  • Business Size: More employees generally mean higher premiums due to increased risk.
  • Projected Revenue: Your estimated 12-month revenue can influence your premium rates.
  • Industry: Certain sectors inherently carry more risk, affecting insurance costs.
  • Location: Whether you operate domestically or internationally can also impact your premium.


At Plum, we aim to offer you customized insurance solutions that fit your business needs. We've extensively analyzed insurance data, conducted industry benchmarks, and researched business insurance options. The outcome is our Policy Recommendation Engine for Business Insurance. Now, you don't have to delve into the complexities of premium calculations or plan selection. Simply answer a few questions about your business, and we'll recommend a cost-effective insurance plan tailored for your organization.