Ask HN: Do you have insurance for your SaaS?

[jrod2121]

I just received a contract from a client, and they are requesting we have insurance for:

(a) Commercial General Liability policy; Excess/Umbrella Liability policy to include coverage for Contractual Liability, Personal/Advertising Injury and Products and Completed Operations with limits of $3,000,000 per occurrence and $3,000,000 in the aggregate.

(b) Professional Liability Insurance insuring but not limited to Intellectual Property infringements, Contractual Liability with a limit of $1,000,000 per occurrence and in the aggregate.

(c) Cyber Insurance to include but not limited to Network Security and Data Privacy with a limit of $1,000,000 per occurrence and in the aggregate.

(d) Worker’s Compensation insurance with statutory limits to include Employer’s Liability with a limit of not less than $1,000,000.

We run an online SaaS business, just a small team of 2 people -- we have many clients and this is the first time we've ever received this. Is all of this necessary or is it common for lawyers to include this in contracts? Does anyone have this insurance?

[throwawayinsnce]

Call Geico. They'll refer you to HISCOX (transfer your call) and their prices are reasonable. You could just call HISCOX directly but I suspect they give Geico customers a lower quote (you could experiment). I have general liability and identity theft insurance at about $30/month. They quoted me for professional liability and it wasn't much more but I opted out because it covers you giving negligent advice and I don't give clients advice (just code). If you have no employees (legal definition of employee), I question whether you need worker's compensation.

IANAL or an insurance agent and this is not advice, just my personal experience.

[jesusmichael]

1. The GL is a little high... If you're a sole proprietor and you own a home you can get the GL rider for like $200-300 a year.

2. PL isn't expensive typically they rate it by your last 12 months of revenue. We do $10M+ last year and our PL premium is $1900 a year.

3. Never heard of this... Call you're ins company.

4. They might be able to waive the WC if you are both owners of the company and you don't have any employees.

[jrod2121]

Where would we go to get these types of insurance? We are a LLC (2 members, no employees).

[jesusmichael]

Well... most large ins cos have these lines. Allstate, Farmers, State Farm. If you have a house, call your agent they will get you a deal that's a small business rider on your homeowners ins. If you don't have a house... call the agent you got your car insurance from.

Or google "Small business general liability insurance <your city>" There are probably a boatload of brokers.

If you're in SoCal or PHX... I'll give you a couple of names of good biz brokers

if you are employees of your own company and you pay yourself a paycheck (not a shareholder distribution)... you may want to consider a PEO so you don't have to get Worker's comp... that can be a pain in the ass...

[jrod2121]

What about something like hiscox?

[jesusmichael]

yea... whatever... I'm thinking you might get a discount if go with your agent.

[rpedela]

You need A for sure. Most landlords won't allow you to rent an office without it. The rest I think you need to decide if you want their business and if the answer is yes maybe you should have a more expensive enterprise plan like loumf suggested.

[loumf]

Sounds like they need your Enterprise plan

[logn]

Businesses should have this insurance anyway. If I were them, I'd acquire the insurance and act like we had it all along.