Insurance for SaaS developers

Why do SaaS businesses need insurance?

SaaS businesses face a lot of risk. Your livelihood is dependent on infrastructure and technology that can fail at almost any time.

A third-party, like a cloud provider, might go down. Or one of your developers might accidentally deploy an incomplete update. Or you might just run into a good old-fashioned hardware failure.

Whether they’re your fault or not, accidents happen. All your clients will care about is whether their service is still working or not.

Insurance for SaaS businesses helps mitigate the risks you face. So you can focus on your business, knowing you have protection in place.

What insurance does a SaaS business need?

It depends on how your business is structured.

Regardless, all SaaS businesses should have professional indemnity (PI) insurance. With the best will in the world, things can and will go wrong.

When a client claims against you, whether it’s your fault or not, you’ll have to pay to defend yourself. And fork out for any compensation, if you’re found to be in the wrong.

PI insurance handles these costs for you. Stopping a small mistake from hitting your bottom line in a big way.

If your clients ever visit your office, or you visit theirs, you’ll also want public liability (PL) insurance.

If someone’s injured, or their property is damaged, you could be held liable. If it’s found to be your fault, PL covers your legal costs and any compensation you might owe.

All SaaS companies should consider cyber insurance.

It’s no secret that as a SaaS company, you store a lot more sensitive data than the average business. That makes you a lucrative target for cybercriminals.

If you’re hit by a cyber-attack or a data breach, cyber insurance responds in a few different ways. It pays for:

• IT experts to stop the attack and fix your systems
• Legal experts to advise on GDPR, inform ICO, and any next steps
• PR experts to help you manage your response.

Finally, if you employ anyone, you’ll need employers’ liability insurance by law. It covers you if an employee is injured or gets ill due to their work for you, and you’re at fault.

Is cyber insurance necessary for a SaaS company?

While cyber insurance isn’t legally required for a SaaS company, it’s a good idea to have in place.

Due to the nature of SaaS businesses, you hold a lot of sensitive info. This makes you a lucrative target for cybercriminals who’d want nothing more than to sell your data to the highest bidder.

More importantly, the potential impact a data breach could have on your business is disastrous.

The cost of fixing your systems, finding out how the breach or attack occurred, and upgrading your systems to prevent a similar situation in the future... well, it wouldn’t make your finance team happy.

Not to mention any legal proceedings from clients affected. The costs of defending your business, as well as paying out any compensation afterwards would only add more to the bill.

You also need to consider the reputational damage of a data breach. It’s only natural clients would lose some faith in your abilities. Especially if it’s a publicised breach.

So, while cyber insurance isn’t necessary, there’s a reason we advise SaaS businesses to seriously consider it when they’re sorting out their business insurance.

How much does SaaS business insurance cost?

The short answer is it depends.

On what? A few things, like:

• Size of your business – If you’re a start-up with a few clients, you’ll pay less than a multinational business with thousands of clients.
• Your turnover and the size of your contracts – the higher your turnover and the more contracts you have, especially if they’re large, the more you should expect to pay.
• How much cover you need – the amount of cover you choose will change the price. Adding extra covers or increasing the amount the insurer will potentially pay in the event of a claim will push your cost up.
• The nature of your business – what kind of technologies you use and how you use them.

These are just a few examples of the many things that can affect how much you’ll pay for your insurance.

The best way to find out? Get an online quote. It only takes a few minutes.

Do I need insurance if I’m a solo SaaS founder?

In most cases, yes.

Even if you’re just starting your business and don’t have any employees, once you have contracts with clients, you’ll be at risk of a mistake or misunderstanding.

For a very early-stage business - self-funding, building part-time, and not entering contracts or selling services - you may not need professional indemnity insurance just yet. But it’s worth keeping on your radar, and getting covered before you start interacting with the wider world.

The cost of insurance is often more manageable than you might think. Especially when a claim would affect your business a lot more than your more well-established counterparts. Both financially and reputationally.

Why choose us?

We specialise in business insurance. And we know that you don’t always have time on your side.

That’s why we’ve made buying a policy quick and easy. So you can get the cover you need in just a few clicks.

We also know that you’re probably going to have questions. Insurance can be confusing, and sometimes you just need someone on the other end of the phone who knows what they’re talking about.

Every one of our advisers can provide expert advice and guidance. The best part? They keep it simple. In language you can understand.

That’s why our customer service is rated Platinum by the independent reviews platform Feefo.

Oh, and we’ll even pay you if you successfully refer someone to us.

Still on the fence? Check out our customer feedback and find out how we do insurance better.