A bundled tech E&O and cyber liability policy runs $500 to $9,000 a year for most early-stage SaaS companies, with the median seed-stage startup landing close to $1,500 a year, or about $126 a month, for $1M in coverage. That number moves fast in either direction depending on your revenue, the data you touch, and whether an enterprise customer's MSA is forcing your hand.
I priced this out for our own contract review last quarter, and the range surprised me. Here's the actual math, not the "get a quote" brush-off most insurance sites give you.
What the $126 a month actually buys
The average tech E&O bundle for a SaaS company includes both professional liability (your software fails to do what you promised) and cyber liability (a breach exposes customer data) in one policy, because most client contracts now demand both anyway.
At the median price point, you're typically looking at:
- $1M per-claim limit, $1M to $2M aggregate
- A $2,500 deductible
- Breach response, legal defense, and regulatory fines bundled in
Buying the two policies separately costs more. General liability runs about $31 a month, standalone E&O about $91 a month, and standalone cyber about $153 a month on average. Bundle them into a single tech E&O policy and insurers price it lower than the sum of the parts, because a single incident (a bug that leaks data) usually triggers both coverages at once, and underwriting one combined risk is cheaper for them than underwriting two separate ones.
Why your quote might be 3x the median
Four things move your number more than anything else:
- Revenue and headcount. A solo founder pays closer to $35 a month. A 20 to 49 person team pays closer to $105 a month, before you even factor in the other variables below.
- What data you actually store. A project management tool with names and emails pays far less than a fintech or health tech product handling payment data or PHI, even at identical revenue.
- Deductible and limit. Smaller startups can get deductibles as low as $1,000 to $5,000. Push your limit from $1M to $2M or $3M, which most Series A and B companies carry, and the premium climbs with it.
- Claims history. One prior claim, even a small one, moves you into a higher-risk pricing tier for years.
If your quote came back at $400 a month and you're pre-seed with no enterprise customers yet, that's a signal to shop it, not to assume it's just what things cost.
The number that makes the premium look cheap
Here's the cost math that actually matters: the average E&O claim exceeds $115,000. That's not a worst-case outlier, that's the average across settled claims.
A pre-Series B SaaS company I read about lost control of a dev admin account. A bad actor deleted thousands of customer records, and within 48 hours the company was facing 13 separate lawsuits. Their cyber policy covered breach response, legal fees, and customer notifications, and paid out $473,000 in damages.
Run the comparison: $1,500 a year in premium against a single claim averaging $115,000, or a bad week that costs $473,000. The insurance isn't a hedge against a remote possibility. It's a hedge against the one incident that would otherwise come directly out of your runway, at the exact moment you can least afford it.
Tech E&O vs the D&O policy you might already have
Don't confuse this with D&O insurance, which protects your board and officers from lawsuits over corporate decisions and typically costs $2,500 to $25,000 a year on its own. Tech E&O and cyber liability cover a completely different risk: your product failing or your customer data getting exposed. A startup with board members probably needs both, and neither one substitutes for the other in a claim.
The 30-day move
Get three quotes before you need this, not after a customer's security questionnaire flags the gap. Insureon, Vouch, Embroker, and Corgi all quote tech-specific SaaS policies in under 20 minutes online, and having three numbers in hand is the only way to know if your first quote is fair. Confirm the deductible and aggregate limit match what your largest customer contract actually requires, since some enterprise MSAs specify a minimum coverage amount you won't know about until legal sends the redline.
Frequently asked questions
Is tech E&O insurance required for SaaS startups? Not by law, but many enterprise contracts and MSAs require proof of $1M to $2M in coverage before they'll sign, which is when most founders buy their first policy.
What's the cheapest tech E&O policy for a pre-seed startup? Solo founders and very early teams can find bundled coverage starting around $29 to $35 a month, though limits at that price are usually capped near $250,000 to $500,000.
Does tech E&O insurance cover a data breach? A bundled tech E&O and cyber policy does. Standalone E&O without the cyber component typically does not cover breach response, notification costs, or regulatory fines.
How fast can a SaaS startup get covered? Most online brokers quote and bind a policy same-day once you answer their underwriting questionnaire, which usually takes 15 to 20 minutes.
Does a higher deductible always lower the premium meaningfully? Yes, but the drop flattens out past a $10,000 deductible for small policies. Below $1M in revenue, the savings from raising your deductible past $5,000 are usually too small to be worth the added out-of-pocket risk.
Price this before a customer forces the issue. The 20 minutes it takes to get three quotes is cheaper than the week it takes to rush a policy through when legal is already blocking a signed deal.