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Insurance Buying Guide for Startups
Which Insurance Should You Consider?
Consider general liability, technology errors and omissions (E&O), cyber liability, commercial property, workers’ compensation, and directors and officers. Start with the coverages tied to your day-to-day operations, then use the situations and buying questions below to compare your options.
General liability
Customers or other visitors come to your workspace, or your team performs work at a customer site.
Compare the quoted commercial general liability (CGL) terms for premises, products, and completed operations with your locations and work. Check exclusions, aggregates, and separate limits.[1]
Ask Before Buying
Which entity, premises, operations, products, and completed work are included? What exclusions, aggregates, or separate limits change the response to the scenario we described?
Technology errors and omissions (E&O)
A software, hosted service, integration, or implementation error could cause a customer financial loss.
Chubb’s DigiTech summary describes technology E&O for third-party financial injury tied to its insured’s products and services. Ask how your quote defines your software work.[3]
Ask Before Buying
How does this quote define our technology services and covered financial injury? What exclusions, claim triggers, defense-cost terms, and limits apply to a missed deliverable or service error?
Cyber liability
Your company holds customer or employee data, depends on its network, or could incur costs after a cyber incident.
FTC lists costs your company may face, such as forensics, data recovery, and notification, separately from third-party liability claims. Compare those scenarios with quoted terms, limits, and exclusions.[2]
Ask Before Buying
Do the quoted terms address our data, cloud vendors, response vendors, interruption, customer claims, waiting periods, exclusions, and separate sublimits?
Commercial property
You sign a lease, keep equipment or inventory at a site, or hold property belonging to someone else.
List owned or leased business buildings, business property, and property of others separately. California CDI ties property business-interruption examples to direct loss from a covered peril to business property; a cloud outage alone does not meet that example.[1]
Ask Before Buying
Which site, tenant improvements, equipment, inventory, and property of others are listed, at what values? What covered-peril trigger, valuation, deductible, and business-interruption terms apply?
Workers’ compensation
You hire an employee who works remotely or in a state where the company has not operated before.
California DWC says employers with one or more employees must meet the state’s workers’ compensation requirement. Out-of-state employers may need California coverage if employees regularly work there or a contract of employment is entered there. Check each work state.[8][9]
Ask Before Buying
Which employee work locations, payroll, and duties are included in the application and policy? For each state, what local rule or coverage detail needs checking?
Directors and officers
A financing discussion, board change, or investor request raises questions about claims alleging management decisions.
Chubb lists D&O among the coverage highlights of its ForeFront Portfolio 3.0 for private companies. Treat this as one carrier’s product example, not a statement that your startup needs or qualifies for it.[4]
Ask Before Buying
Who would qualify as an insured person or entity? Which management claims, defense costs, exclusions, limits, and application statements are included in the proposed form?
Build a Quote Brief Around the Next Change
Before requesting a quote, list your products and services, customer work, data, cloud and other key vendors, leased sites, equipment, employee work states, and any customer insurance clause.[1]
Update the brief when a contract, product, office, or hire changes. Send the exact clause and ask which quote, limit, entity, or policy document addresses each request. For California employees, check DWC guidance; check each other work state separately.[1][8][9]
Map a SaaS Incident to the Proposed Forms
Separate cyber incidents, physical property damage, and software or provider outages when comparing downtime. FTC lists cyber-cost examples; California CDI ties property business interruption to direct covered loss. Chubb’s cyber summary also describes interruption tied to insured systems and outsourced technology providers.[2][1][3]
Run one realistic event through the quote: what triggers coverage, whose systems count, whether vendor outages qualify, which waiting periods or sublimits apply, and how customer claims are treated.[3][2]
Providers to Compare by Coverage
General liability
Alliance Risk
Spot Score
Review Score
Not enough ratings
Amelia Risk
Spot Score
Review Score
2.0/ 10
Technology errors and omissions (E&O)
Alliance Risk
Spot Score
Review Score
Not enough ratings
Amelia Risk
Spot Score
Review Score
2.0/ 10
Cyber liability
Alliance Risk
Spot Score
Review Score
Not enough ratings
Amelia Risk
Spot Score
Review Score
2.0/ 10Commercial property
Alliance Risk
Spot Score
Review Score
Not enough ratings
CFC
Spot Score
Review Score
Not enough ratings
Workers’ compensation
Alliance Risk
Spot Score
Review Score
Not enough ratings
Amelia Risk
Spot Score
Review Score
2.0/ 10
Directors and officers
Alliance Risk
Spot Score
Review Score
Not enough ratings
Amelia Risk
Spot Score
Review Score
2.0/ 10Common Questions
When should a startup buy business insurance?
Review business insurance when you add a customer, product, lease, asset, or employee. Compare likely losses with what the startup could afford to pay itself.[1]
Read the Full AnswerWhat should I do when a remote customer asks for insurance paperwork?
Use the customer’s exact clause as a checklist: entity, coverage, limits, dates, and requested document. Ask the broker to match each item to the quote and policy documents before you say the request is met.[1]
Read the Full AnswerHow are technology E&O and cyber insurance different?
Compare proposed cyber terms for incident response costs with the terms for a software error that causes customer financial loss. Chubb’s DigiTech summary describes technology E&O for third-party financial injury from its insured products and services.[2][3]
Read the Full AnswerWhat should a SaaS startup ask about data loss or downtime?
Compare cyber recovery and lost income, physical damage to business property, and interruption at an insured system or provider. Chubb’s summary is one cyber product example; California CDI’s property-interruption example requires direct loss from a covered peril.[2][3][1]
Read the Full AnswerWhat insurance should a startup review before signing a lease?
For a California quote, list owned or leased business buildings, business property, and property of others separately from CGL. Compare the lease’s insurance wording with that inventory.[1]
Read the Full AnswerDoes startup fundraising mean I need directors and officers (D&O) insurance?
Fundraising alone does not settle the D&O decision. Check the actual investor, board, or financing wording and ask the broker to compare it with the proposed form.[4]
Read the Full AnswerHow can a founder get health insurance before hiring employees?
HealthCare.gov says a person running an income-producing business without employees is self-employed and can buy individual Marketplace coverage. Losing job-based coverage qualifies for a Special Enrollment Period. This is health coverage guidance, not a rule for commercial liability or worker classification.[5]
Read the Full AnswerWhen should a startup compare employee health benefits?
When hiring, compare group plans with your budget and hiring plans. In California, eligible employers can choose plan tiers and contributions through Covered California for Small Business; employees choose among offered plans. This is separate from commercial liability.[6]
Read the Full AnswerWhat should a startup check about workers’ compensation for remote employees?
Check where each employee works, not only where the startup formed. California DWC says employers with one or more employees in California must meet the state’s workers’ compensation requirement. An out-of-state employer may need California coverage if employees regularly work there or a contract of employment is entered there.[8][9]
Read the Full AnswerHow should a startup compare business insurance quotes?
Compare quotes for the same entity, operations, locations, policy period, limits, deductibles or retentions, and exclusions. Different assumptions can make a lower premium a poor comparison.[1]
Read the Full AnswerSources and Further Reading
- Commercial Insurance Guide — California Department of Insurance. Commercial Insurance Guide: commercial property, business interruption, commercial general liability, and rating a commercial insurance policy; revised June 14, 2024.
California guide to commercial property, general liability, business interruption, and quote-rating factors.
- Cyber Insurance — Federal Trade Commission. What Should Your Cyber Insurance Policy Cover?; First-Party Coverage; Third-Party Coverage.
FTC small-business examples for first-party and third-party cyber coverage; compare them with the actual quote.
- Cyber Insurance Coverage & Products — Chubb. DigiTech Enterprise Risk Management; Professional Enterprise Risk Management; Cyber Insurance Coverage; First-Party Coverage.
Chubb-attributed technology E&O and cyber interruption examples; product summaries are not the buyer’s policy wording.
- Small Business ForeFront Portfolio 3.0 for Private Companies — Chubb. Coverage Highlights; Directors & Officers; Key Features.
Chubb’s private-company coverage highlights include D&O; this does not establish a universal fundraising requirement.
- Health Care Insurance Coverage for Self-Employed Individuals — HealthCare.gov, Centers for Medicare & Medicaid Services. Marketplace coverage for self-employed people; job-based coverage; spouse coverage.
Current federal Marketplace guidance for founders with no employees and loss of job-based coverage.
- Covered California for Small Business — Covered California. What You Can Do With CCSB; self-employed people with no W-2 employees; applicable large employer summary.
California group-health plan choices and the individual-plan route for self-employed people with no W-2 employees.
- Determining if an Employer Is an Applicable Large Employer — Internal Revenue Service. Basic Information; Full-Time and Full-Time Equivalent Employees; Aggregation Rules; Seasonal Workers; New Employers.
IRS explanation of prior-year full-time and FTE counting, aggregation, seasonal workers, and new-employer rules.
- Answers to Frequently Asked Questions for Employers — California Department of Industrial Relations, Division of Workers’ Compensation. About Insurance Coverage; employee requirement, sole proprietors and officers; FAQ page dated March 2023.
California-specific workers’ compensation employer guidance, including employee and business-structure questions.
- Employer Information — California Department of Industrial Relations, Division of Workers’ Compensation. Employer information for businesses with employees working in California, including out-of-state employers.
California DWC example for out-of-state employers with employees who work in California.
Spot, a product of Tools for Enlightenment, publishes this guide and works in the commercial insurance market. This is general buyer education; policy terms and state-specific obligations determine coverage and requirements.
Updated 2026-09-28. Editorial Policy
Get Help With Insurance Buying and Renewals.
Get help buying coverage and managing renewals, with less paperwork for your team. Start with a free consultation.