Insurance for SaaS

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Overview

If there’s one “new” industry that has entrenched itself with no signs of going away, it’s Software as a Service (SaaS). It evolved from the days of a few mail-order software companies into a vast landscape of cloud-based behemoths with steady subscription-based revenue, low overhead and plenty of happy customers.

Companies categorized under this industry include Microsoft, SalesForce, Cisco, Adobe, Amazon Web Services, Slack and Zendesk. And those are just a few. These giants are setting the standard for how tech companies deliver their services, whether to other businesses or direct to consumers.

The value this model adds for innovators and their clients is undeniable and reflected in the growth of the industry. Consider the following two key points made by Forbes:

  1. The total global public cloud market will be $178B in 2018, up from $146B in 2017, and will continue to grow at a 22% compound annual growth rate (CAGR).
  2. Forrester predicts that more than 50% of global enterprises will rely on at least one public cloud platform to drive digital transformation and delight customers.

Why is Insurance for SaaS Companies Important?

SaaS companies need their service to be as stable, fast and effective as advertised, but service outages can come from anywhere. Anything from routine system maintenance to targeted DDoS or cyber extortion attacks can trigger a business interruption. If the service fails (whether it’s because of an attack on their system or the system of a critical vendor like AWS) and then clients lose money, SaaS companies will have to pay the price in the form of lost income or, worse, lawsuits.

The damage to the company’s value, reputation, customer confidence can be significant after system failures and data breaches. Microsoft experienced this early on, soon to be followed by the likes of Yahoo, LinkedIn, and Adobe.

Moving beyond the more technical, computer-based crises that can happen, there’s also the possibility of a more traditional failure in the company’s professional service. Sometimes a more carefully tailored professional liability (E&O) policy will also be required to cover unique exposures. An accounting software provider will want Tech E&O coverage in case a glitch causes a client some sort of financial loss, but what about run-of-the-mill accounting errors? Those would be excluded from a Tech E&O policy so a separate Accountant’s E&O policy may be necessary.

Data Breaches

Data breaches are when sensitive information is data is copied, transmitted, viewed, stolen or used by an individual unauthorized to do so. IBM study estimated that the average cost for companies who are victims of cyber attacks is a whopping $141 per record.

Cyber Attacks

SaaS companies are often victims of cyber crime such as DDoS attacks and randsomewear attacks. These attacks can lead to data being stolen or destroyed. The average cost of a cyber attack for enterprises grew from $1.2 million in 2016 to $1.3 million in 2017.

System Failures

By nature SaaS companies are heavily reliant on back end & front end systems and third party services providers for their applications, servers and data services. Any outages, downtimes or failures can result in lawsuits from customers who rely on their platforms to run their business.

Compliance

SaaS companies must stay current on privacy and security measures to retain long-term customers. This approach means more than merely adhering to best cybersecurity practices, such as keeping software updated and servers maintained. SaaS companies must follow regulatory standards, as well.

Types of SaaS Companies that need insurance

  • Business Management
  • CRMs
  • Accounting Software
  • Collaboration Platforms
  • Enterprise Resource Planning
  • CMS & E-commerce
  • Communication platforms
  • HR/HRM solutions

SaaS Frequently Asked Questions

he cost of insurance for SaaS companies will depend on several things, including the company’s size and development stage. Other factors include:

  • Exposures: risks being insured
  • Company practices: views on safety, compliance, and risk management
  • Program structure: the amount of deductible and willingness for a company to assume more risk
  • Claims history: the type and amount of past claims against the company

How it works

Finding insurance coverage doesn’t have to be painful. We aim to make the purchasing experience as streamlined & intuitive as possible.

1
Get a quote

Use our custom built online portal to get quotes fast. We automate clerical tasks that plague the traditional insurance brokerages, giving us more time to be responsive and alert to your company’s needs.

1
Get a quote

Use our custom built online portal to get quotes fast. We automate clerical tasks that plague the traditional insurance brokerages, giving us more time to be responsive and alert to your company’s needs.

2
Pair with a specialist

No two organizations are the same. Our team of coverage experts partners with your team to engineer your risk management strategy, together. We take the time to understand the intricacies of your company to get you the best possible coverage.

2
Pair with a specialist

No two organizations are the same. Our team of coverage experts partners with your team to engineer your risk management strategy, together. We take the time to understand the intricacies of your company to get you the best possible coverage.

3
Stay one step ahead

To do better, you need to know better. With changing political, technological, legal and economic landscapes, staying ahead of the curve is critical.

Our in-house team is tapped into the latest developments of your industry, proactively ensuring you’re covered.

3
Stay one step ahead

To do better, you need to know better. With changing political, technological, legal and economic landscapes, staying ahead of the curve is critical.

Our in-house team is tapped into the latest developments of your industry, proactively ensuring you’re covered.

Rachel Jenkins, Customer Success Manager

Meet your specialist

Rachel is one of the premier leading insurance professionals with almost 10 years of experience in the industry. She has been with the Founder Shield team for several years, focusing on client advising and improving policy language for venture-backed companies including financial institutions, Ecommerce, and SaaS companies.

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