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Why do cybersecurity companies and consultants need insurance?
Your clients trust you to keep their tech systems safe, but just one mistake could result in a costly lawsuit. Protect your cybersecurity company with insurance policies that cover common liabilities, including legal costs, medical expenses, and repair costs for property damage.
Find the right coverage
Insureon helps cybersecurity consultants find insurance coverage that matches your unique risks.
Get free expert advice and peace of mind knowing you have the right property and liability coverage for your cybersecurity company.
What types of insurance do cybersecurity consulting companies need?
State laws and client contracts may require you to have insurance coverage. These policies cover the most common risks faced by cybersecurity companies and consultants.
Technology errors and omissions insurance
Technology E&O, also called professional liability insurance, is crucial for cybersecurity consulting services. It covers lawsuits related to work performance, such as claims that your advice caused financial harm.
BEST FOR
- Failure to deliver promised services
- Accusations of negligence
- Work errors and oversights
Cyber insurance
If a client suffers a data breach or cyberattack, a cyber insurance policy protects cybersecurity companies from a lawsuit by helping to pay for legal expenses and associated costs.
BEST FOR
- Data breach legal costs
- Client notification expenses
- Fraud monitoring costs
General liability insurance
This policy covers risks every cybersecurity consultant faces, such as accidental damage to a client's laptop. Bundle it with property insurance for savings in a business owner’s policy.
BEST FOR
- Client bodily injuries
- Damaged client property
- Slander and other personal injuries
Fidelity bonds
This bond, also called an employee dishonesty bond, compensates clients if an employee at your cybersecurity startup steals from them. It's often required for client contracts.
BEST FOR
- Employee theft or fraud
- Unlawful data access by an employee
- Illegal fund transfer by an employee
Workers’ compensation insurance
Most states require workers' comp for cybersecurity companies that have employees. It also protects sole proprietors from work injury costs that health insurance might deny.
BEST FOR
- Employee medical expenses
- Disability benefits
- Lawsuits from workplace injuries
Commercial auto insurance
This policy covers the cost of an accident involving a vehicle owned by your cybersecurity company. Most states require this coverage for business-owned vehicles.
BEST FOR
- Car accidents
- Vandalism and theft
- Weather damage
Looking for different coverage? See more policies.
How much does insurance cost for cybersecurity companies?
A cybersecurity company with only a few employees will pay less for insurance than a larger business.
Factors that affect premiums include:
- Cybersecurity / tech services offered
- Business property and equipment
- Business revenue
- Types of insurance policies purchased
- Policy limits and deductibles
- Claims history
How do I get insurance for a cybersecurity services company?
It's easy to get cybersecurity business insurance if you have your company information on hand. Our insurance application will ask for basic facts about your business, such as revenue and number of employees. You can buy a policy online and get a certificate of insurance with Insureon in three easy steps:
- Complete a free online application
- Compare insurance quotes and choose policies
- Pay for your policy and download a certificate
Insureon's licensed agents work with top-rated U.S. insurers to find insurance for your cybersecurity company, whether you work independently or hire employees.
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Common questions about cybersecurity services business insurance
Do I need insurance if I’m a self-employed cybersecurity consultant?
Yes. Self-employed cybersecurity consultants often have the same risks as small businesses. For example, a client could sue you after experiencing a data breach when you had recently installed a security program for them. This single lawsuit could financially devastate your business.
Cybersecurity business insurance coverage protects independent contactors and sole proprietors by paying for costly expenses, such as lawsuits, medical bills (e.g., from carpal tunnel), and property damage. In order to sign a contract, some clients may require you to carry this policy.
What's the difference between first-party and third-party cyber liability insurance?
When buying tech E&O and cyber insurance, you may come across the following terms:
- First-party cyber liability insurance: Also called data breach insurance, this coverage offers protection against cyber risks at your own business, such as a data breach that exposes your customers' email addresses or other personal information stored by your business.
- Third-party cyber liability insurance: This covers your responsibility for cyber risks that harm another business. For example, your small business might offer security services to your clients. If a weakness in that security causes your client's data to be exposed, then your cybersecurity company could be held liable for the breach.
You can typically add first-party cyber coverage to your general liability insurance or business owner's policy (BOP). Third-party cyber coverage is included in tech E&O insurance, which bundles cyber insurance with errors and omissions insurance.
What other types of insurance coverage do cybersecurity startups need?
Getting the right insurance is a crucial part of any business's risk management plan. Depending on the type of cybersecurity company you have (e.g., cybersecurity software company), you may want to consider additional policies, such as:
- Business owner's policy: A BOP combines general liability coverage with commercial property insurance at a discount. It protects against common lawsuits and business property damage.
- Business interruption insurance: This policy covers day-to-day operating expenses and lost profits in the event of a temporary closure due to a natural disaster or other covered property claim. It's often included with a BOP or property insurance.
- Employment practices liability insurance (EPLI): Covers legal costs from employment-related lawsuits, such as an allegation of unfair hiring practices or wrongful discipline.
- Directors and officers insurance (D&O): Pays for legal costs when a board member or officer is taken to court for a decision they made on behalf of your cloud company.