FAQ - What insurance do venture-backed startups typically need?

What insurance do venture-backed startups typically need?

Venture backed startups often see insurance needs come up earlier than other businesses, mainly because of investor expectations and enterprise contract requirements. Directors and officers insurance is often requested around or after a funding round, especially if the company is adding a board or independent directors. Professional indemnity, sometimes described as errors and omissions, is also commonly required in customer contracts, particularly for SaaS and technology services. Cyber insurance is often expected if you store customer data, process sensitive information, or connect into client systems. Employment practices liability becomes more relevant as headcount grows and hiring increases, because the risk of employment related claims generally rises with the size of the team.

Example: After raising a Seed or Series A round, investors may ask the company to put directors and officers insurance in place as part of improving governance and meeting common board expectations.

‍

FAQ

Related Questions

Do startups need management liability insurance?

Management liability insurance can be relevant for startups, even before a full board is in place. It is a type of business insurance designed to respond to certain claims made against a company and its managers about how the business is run.

Do startups need management liability insurance?

Do startups need directors and officers (D&O) insurance?

Not always, but it is commonly requested once a startup has external investors, a board, or plans to scale. D&O is designed to respond to claims alleging wrongful acts in managing the company, subject to the policy terms.

Do startups need directors and officers (D&O) insurance?

When should a startup buy business insurance?

It is often recommended to consider business insurance before you need it urgently, because the trigger is usually a contract, a hire, or a change in risk. Common times startups arrange insurance include before signing larger customer contracts, before raising capital, and before hiring employees. It is also common to consider cover before you start handling meaningful customer data, or before launching a physical product.

When should a startup buy business insurance?

What insurance do venture-backed startups typically need?

Venture backed startups often see insurance needs come up earlier than other businesses, mainly because of investor expectations and enterprise contract requirements. Directors and officers insurance is often requested around or after a funding round, especially if the company is adding a board or independent directors. Professional indemnity, sometimes described as errors and omissions, is also commonly required in customer contracts, particularly for SaaS and technology services. Cyber insurance is often expected if you store customer data, process sensitive information, or connect into client systems. Employment practices liability becomes more relevant as headcount grows and hiring increases, because the risk of employment related claims generally rises with the size of the team. Example: After raising a Seed or Series A round, investors may ask the company to put directors and officers insurance in place as part of improving governance and meeting common board expectations.

What insurance do venture-backed startups typically need?

Protect your business today.

Fast. Simple. Trusted.

© 2026 upcover Pty Ltd ABN 17 628 197 437, Corporate Authorised Representative (CAR 1299211) of Experience Insurance Services Pty Ltd ABN 41 657 596 506, AFSL 539078. upcover arranges insurance products with selected insurers and underwriters. upcover does not compare all general insurers or insurance products available in the market.

The information contained on this website is general advice only and has been prepared without taking into account your individual needs, objectives and financial situation. It should not be relied upon as advice. All insurance products are subject to the terms, conditions, limits and exclusions contained in the relevant policy wording and Product Disclosure Statement. Before deciding whether a particular insurance product is right for you, please consider your personal circumstances and read the relevant Product Disclosure Statement, Target Market Determination, Policy Wording, and Financial Services Guide.