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Technology Business Insurance

The technology industry has an unrivaled pace of innovation, with companies of all sizes facing inherent risks and niche exposures. Only insurance tailored for tech companies can keep pace with such an ever-changing landscape and measure up to the unique challenges. The tech industry isn’t slowing down, and as it continues to evolve, insurance can protect its most critical assets to support rapid growth. As part of the tech industry, Founder Shield understands what it takes to succeed in this space — even when the rules change and the finish line moves.

Technology Insurance

Risks in the Tech Industry

Risks in the Tech Industry

Science

Cyber Risks

Cyber risk is a major concern for tech companies of all sizes. In 2022, the average cost of a data breach to a US company was $9.44 million, according to IBM’s Cost of a Data Breach Report. Cyber attacks can also cause significant reputational damage and disrupt business operations.

Regulatory Risk

Tech Professional Liability

Errors & Omissions claims can be very costly for tech companies, especially if the claim involves a large customer or client. For example, in 2019, Oracle was awarded $1.3 billion in damages in a lawsuit alleging that its software caused a customer to lose millions of dollars in revenue.

Clinical Trials

IP Threats

Intellectual property (IP) is a major risk for tech companies because it is essential to their success. Tech companies rely on their IP to create products and services that are innovative and competitive. Without IP protection, tech companies would be vulnerable to competitors who could copy their products and services without investing in the research and development that went into creating them.

Patent

Product Liability

Product liability is a major risk to tech companies because their products are often complex and can cause significant harm if defective. Tech companies can be held liable for injuries or damages caused by their products, even if they did not intend to cause harm.

Media Risk Management Guides

At Founder Shield, we offer insurance coverage for various Tech startups. Some of the types of startups we specialize in include:

Biotech

Cloud Computing

Virtual Care

Cybersecurity

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gaming

Gaming

mobile app

Mobile App Development

wallet

Mobile Payments and Digital Wallets

augmented

Virtual and Augmented Reality

Technology Insurance

Technology Insurance is the bedrock of risk management for tech companies, offering a suite of protections tailored to the industry’s unique needs. It often encapsulates coverage for software and hardware, data breaches, and even business interruption. This type of insurance is vital for tech companies because it can be customized to cover the broad spectrum of risks associated with technological services and products. Whether a company faces a malfunctioning product that leads to business losses or a service outage impacting customers, technology insurance helps ensure that such incidents don’t threaten the company’s financial stability or reputation.

general liability

General Liability Insurance

Technology Insurance is the bedrock of risk management for tech companies, offering a suite of protections tailored to the industry’s unique needs. It often encapsulates coverage for software and hardware, data breaches, and even business interruption. This type of insurance is vital for tech companies because it can be customized to cover the broad spectrum of risks associated with technological services and products. Whether a company faces a malfunctioning product that leads to business losses or a service outage impacting customers, technology insurance helps ensure that such incidents don’t threaten the company’s financial stability or reputation.

General Liability Insurance

Technology Insurance is the bedrock of risk management for tech companies, offering a suite of protections tailored to the industry’s unique needs. It often encapsulates coverage for software and hardware, data breaches, and even business interruption. This type of insurance is vital for tech companies because it can be customized to cover the broad spectrum of risks associated with technological services and products. Whether a company faces a malfunctioning product that leads to business losses or a service outage impacting customers, technology insurance helps ensure that such incidents don’t threaten the company’s financial stability or reputation.

errors and omissions

Errors and Omissions (E&O) Insurance

Errors & Omissions (E&O) Insurance is critical for protecting tech companies against claims of negligence or inadequate work. This type of insurance covers the legal costs and damages that may arise from mistakes, failure to deliver a promised service, or the provision of substandard service. Given that technology services and products often involve complex, specialized work, the risk of such claims is significant. E & O insurance ensures that a tech company’s financial resources are not drained by these claims, which could be catastrophic in scale relative to the company’s size.

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Errors & Omissions (E&O) Insurance is critical for protecting tech companies against claims of negligence or inadequate work. This type of insurance covers the legal costs and damages that may arise from mistakes, failure to deliver a promised service, or the provision of substandard service. Given that technology services and products often involve complex, specialized work, the risk of such claims is significant. E & O insurance ensures that a tech company’s financial resources are not drained by these claims, which could be catastrophic in scale relative to the company’s size.

crime insurance

Tech Errors & Omissions Insurance

Tech Errors & Omissions Insurance is a specialized form of E&O insurance that addresses the specific risks associated with the delivery of technology services and products. This insurance is vital because it covers both third-party claims of financial loss due to product or service failure and claims of negligence in the creation or implementation of a technology. For tech companies whose products and services are integral to their client’s operations, the impact of errors or omissions can be particularly severe, making this insurance an indispensable part of their risk management strategy.

Errors and Omissions Insurance

Tech Errors & Omissions Insurance is a specialized form of E&O insurance that addresses the specific risks associated with the delivery of technology services and products. This insurance is vital because it covers both third-party claims of financial loss due to product or service failure and claims of negligence in the creation or implementation of a technology. For tech companies whose products and services are integral to their client’s operations, the impact of errors or omissions can be particularly severe, making this insurance an indispensable part of their risk management strategy.

cyber insurance

Cyber Liability Insurance

Cyber Liability Insurance is increasingly crucial for tech companies as cyber threats grow more sophisticated. This insurance protects against the fallout from cyber incidents such as data breaches, ransomware attacks, and network security failures. For tech companies that deal with sensitive data and rely heavily on digital infrastructures, a cyber incident can be devastating, not only financially but also in terms of customer trust. Cyber Liability Insurance provides a safety net that helps cover the costs of recovery, legal fees, and compensations related to data breaches, ensuring that a cyber incident doesn’t weaken the company.

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Cyber Liability Insurance is increasingly crucial for tech companies as cyber threats grow more sophisticated. This insurance protects against the fallout from cyber incidents such as data breaches, ransomware attacks, and network security failures. For tech companies that deal with sensitive data and rely heavily on digital infrastructures, a cyber incident can be devastating, not only financially but also in terms of customer trust. Cyber Liability Insurance provides a safety net that helps cover the costs of recovery, legal fees, and compensations related to data breaches, ensuring that a cyber incident doesn’t weaken the company.

Directors and Officers (D&O) Insurance

Directors & Officers (D&O) Insurance is crucial for tech companies as it protects the personal assets of their executives in the event of litigation arising from their management decisions. Since tech companies often face rapid growth and investment, their leaders may make decisions that can lead to shareholder lawsuits or other legal actions. D&O Insurance ensures that the personal finances of company leaders are not at stake, which is vital for attracting and retaining high-caliber talent in the management team.

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Directors & Officers (D&O) Insurance is crucial for tech companies as it protects the personal assets of their executives in the event of litigation arising from their management decisions. Since tech companies often face rapid growth and investment, their leaders may make decisions that can lead to shareholder lawsuits or other legal actions. D&O Insurance ensures that the personal finances of company leaders are not at stake, which is vital for attracting and retaining high-caliber talent in the management team.

Intellectual Property

Intellectual Property Insurance

Intellectual Property (IP) Insurance is critical for tech companies because it protects one of their most valuable assets: intellectual property. This insurance protects against infringement claims and helps cover the costs of enforcing IP rights. In the fast-paced tech industry, where innovation is key to staying competitive, the risk of IP litigation is high. IP Insurance enables tech companies to defend and assert their intellectual property rights without the risk of financial ruin, allowing them to continue innovating and driving progress in their field.

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Intellectual Property (IP) Insurance is critical for tech companies because it protects one of their most valuable assets: intellectual property. This insurance protects against infringement claims and helps cover the costs of enforcing IP rights. In the fast-paced tech industry, where innovation is key to staying competitive, the risk of IP litigation is high. IP Insurance enables tech companies to defend and assert their intellectual property rights without the risk of financial ruin, allowing them to continue innovating and driving progress in their field.

Tailored for the needs of Technology Companies

For tech companies, both large and small, Founder Shield offers a diverse array of insurance solutions. Recognizing that the traditional blanket approach isn’t suitable for the tech sector, we craft our policies to address its distinct challenges. As your business grows, our coverage evolves to ensure continuous protection.

Fast and attentive service. Always there to help with my questions and make sure we get the right coverage. Highly recommend!

Demetri Karagas Co-Founder

Technology Insights

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ebook

Risk Management Guide for Technology

The guide is called Venture Capital and Startup Statistics 2023

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Why Choose Founder Shield?

Founder Shield is committed to helping technology companies succeed by providing them with the insurance coverage they need and the customer service they deserve. Here are just a few of the reasons why our clients trust us:

1
Market Access

Founder Shield has access to top insurance carriers, empowering us to negotiate the best possible rates for our clients — in contrast to many traditional insurance companies that often only have access to a limited number of carriers. 

2
Industry Expertise

Founder Shield’s team of experts brings an in-depth knowledge of the tech sector. We understand the challenges and risks tech companies face daily, plus we know how to protect against threats in this uncertain landscape.

3
Customize Coverage

Founder Shield can develop bespoke insurance coverages specifically designed for the unique risks tech companies face. We don’t serve off-the-shelf solutions but instead, craft our programs to protect tech companies where you need it most.

Tech Startup Insurance FAQs

How does technology insurance work?

Technology insurance is a specialized business insurance policy designed to meet the unique needs of companies in the tech sector. It typically includes a combination of coverages that can be tailored to the specific risks faced by tech businesses, such as data breaches, software failures, and hardware damage. When a covered event occurs, the policyholder files a claim, and if approved, the insurer provides financial compensation up to the policy’s limits, minus any applicable deductibles.

Technology insurance is a specialized business insurance policy designed to meet the unique needs of companies in the tech sector. It typically includes a combination of coverages that can be tailored to the specific risks faced by tech businesses, such as data breaches, software failures, and hardware damage. When a covered event occurs, the policyholder files a claim, and if approved, the insurer provides financial compensation up to the policy’s limits, minus any applicable deductibles.

Why is technology insurance important?

Technology insurance is vital because it addresses the inherent risks of operating in the tech industry, which traditional business insurance policies may not cover. It’s a critical safety net that protects against the high costs associated with data breaches, intellectual property disputes, and technological errors. This type of insurance helps tech companies manage financial risks, ensuring they can continue to innovate and operate even when faced with significant challenges.

Technology insurance is vital because it addresses the inherent risks of operating in the tech industry, which traditional business insurance policies may not cover. It’s a critical safety net that protects against the high costs associated with data breaches, intellectual property disputes, and technological errors. This type of insurance helps tech companies manage financial risks, ensuring they can continue to innovate and operate even when faced with significant challenges.

Who needs tech insurance?

Tech insurance is needed by any business that works with technology, whether developing software, offering tech-related services, or manufacturing hardware. This includes startups, IT consultants, data storage companies, app developers, and more. Any company whose core operations are deeply intertwined with technology should consider tech insurance to protect against sector-specific risks.

Tech insurance is needed by any business that works with technology, whether developing software, offering tech-related services, or manufacturing hardware. This includes startups, IT consultants, data storage companies, app developers, and more. Any company whose core operations are deeply intertwined with technology should consider tech insurance to protect against sector-specific risks.

What risks does tech insurance cover?

Tech insurance covers a broad range of risks, including, but not limited to, data breaches and cyberattacks, software and hardware malfunctions, business interruption due to technological failures, and liability claims stemming from tech products or services. It can also cover the costs of rectifying coding errors, system downtime, and loss of third-party data and can extend to include intellectual property infringement in some cases.

Tech insurance covers a broad range of risks, including, but not limited to, data breaches and cyberattacks, software and hardware malfunctions, business interruption due to technological failures, and liability claims stemming from tech products or services. It can also cover the costs of rectifying coding errors, system downtime, and loss of third-party data and can extend to include intellectual property infringement in some cases.

Get a Quote for Technology Insurance

Don’t let unforeseen challenges catch your tech-centric startup off guard. Reach out for a quote now and discover how Founder Shield can proactively safeguard your company and its promising trajectory.