Software and SaaS Company Insurance

What makes this risk different?

Underwriters need to understand the product or service, who relies on it and what could happen if it fails. For this activity, describe application use, customer sectors, cloud dependencies, service-level promises, data handled, backup and recovery, subcontractors and international customers. Separate your own design and delivery responsibilities from those of component suppliers, installers, customers and subcontractors. Give the insurer a realistic account of maximum potential loss and any past claims or incidents.

Insurance questions to review

• Public and products liability: alleged third-party injury or property damage from operations, products and completed work, subject to exclusions and declared activities.
• Technology professional indemnity: defined professional services, software and advice exposures, often on a claims-made basis with notification and retroactive-date conditions.
• Cyber: incident response, privacy and covered network events, which may differ from a product defect or implementation error.
• Other cover: recall expense, property, stock, transit, management liability or crime where the actual operation warrants it.

Check limits, excesses, aggregate limits, exclusions, territorial and jurisdiction clauses and any contractually required insured parties. No item listed here is automatically included.

Illustrative exposure

Hypothetical example: A deployment introduces an error that prevents users accessing a critical platform. First-party response and a client’s claim may follow different policies. This example describes an exposure only; a claim outcome depends on the facts and policy.

SaaS service dependency

Set out what the platform does, customer industries, uptime commitments, data types and the share of revenue from subscription versus implementation or bespoke work. Explain cloud hosting dependencies, backups, recovery objectives, access controls and incident notification obligations. Identify any system used in a critical workflow where even a short outage could cause material loss.

Separate an implementation mistake, a software defect, a privacy incident and a third-party cloud failure when reviewing the wording. Technology PI and cyber may respond to different allegations, while the policy treatment of service credits and assumed liabilities requires particular attention. Include a representative customer contract and data-processing terms in the submission.

What to send for a quote

Provide a concise business and product description, turnover split by activity and country, principal contracts, customer industries, manufacturing and supplier arrangements, testing and quality processes, existing schedules and claims history. Where relevant, include technical documentation through a suitable secure follow-up channel.

Software and SaaS insurance FAQs

Is an ordinary software bug covered by cyber insurance?

Not automatically. A software error or failed implementation may cause client financial loss without a privacy or network-security incident. Technology PI and cyber have different triggers, definitions and exclusions.

How are cloud-provider outages assessed?

Your own lost revenue and a client’s claim against your business are different exposures. Review dependent-service interruption, waiting periods, sublimits and third-party liability terms. The relevant cause of loss must meet the policy wording.

Does cyber insurance cover all downtime claims?

No. Trigger, cause, exclusions, limits and third-party cover must be checked.

See also technology professional indemnity, our technology insurance guide and existing quote areas.