How Much Does Business Insurance Cost For SAAS Companies?

SAAS companies in the U.S. can expect to pay between $360 and $600 annually for business insurance, averaging $30 to $50 per month. The primary cost drivers are company size, revenue, data sensitivity, cybersecurity measures, claims history, and coverage limits.

How Much Does SAAS Company Insurance Cost?

The average SaaS company in the U.S. pays between $360 and $600 per year for a full business insurance package. That breaks down to roughly $30 to $50 per month. However, this is just a ballpark range, and actual costs can vary widely depending on your specific situation.

Every SaaS business is different, so insurance costs can vary. A small startup with a few users and no employees will usually pay much less than a large company with thousands of users, a big team, and sensitive customer data.

Things like the type of software you offer, how much customer data you store, your security measures, number of employees, and where your company is based all affect how much your business insurance costs.

For example, a company that stores health or financial data may pay more for cyber liability coverage. And a business located in an area where lawsuits are more common may have higher general liability costs

Understanding these variables can help you better estimate your insurance needs and prepare for the real costs of protecting your SaaS company.

Average SAAS Company Insurance Costs For Coverage Types

When it comes to protecting your SaaS company, different types of insurance cover different risks. Understanding the average cost, coverage details, and what influences pricing for each policy type can help you build a more effective insurance plan. Here’s a closer look at the major coverages most Saas companies need.

• General liability insurance: $30 per month
• Workers’ compensation insurance: $45 per month
• Commercial auto insurance: $200 per month
• Technology errors and omissions insurance: $88 per month
• Cyber insurance: $149 per month
• Fidelity bonds: $82 per month

Technology Errors And Omissions Insurance

Technology errors and omissions insurance is one of the most important policies for SaaS companies because it protects against claims tied to software malfunctions, service outages, coding errors, or platform failures. The average cost for a SaaS business is about $88 per month.

If a system bug causes a client to lose data, experience downtime, or suffer financial loss, this coverage can help pay for legal defense, settlements, and damages. Pricing depends on the type of software you provide, customer volume, revenue size, and coverage limits selected.

Average annual premiums in 10 states:

Note: Estimates reflect blended averages from sample market quotes. Actual premiums vary by limits, claims history, customer contracts, and business size.

Cyber Insurance

Cyber insurance is a key policy for SaaS companies because most rely on user data, cloud storage, authentication systems, and online access. The average cost is about $149 per month.

If hackers breach your software, expose user information, encrypt your servers, or disrupt your service, cyber insurance can help pay for notification expenses, investigation, recovery work, legal fees, and regulatory penalties. Premiums depend on how sensitive the data is, cybersecurity controls, and breach history.

Average annual premiums in 10 states:

Note: Estimates reflect cyber insurance averages for SaaS businesses. Actual pricing varies by data exposure, security systems, and contractual requirements.

General Liability Insurance

General liability insurance protects SaaS companies from claims involving bodily injury or property damage that occur at an office or on-site location. The average cost is about $30 per month.

If a vendor slips in your workspace or a visitor is injured, this policy can help cover medical bills and legal defense. Costs depend on company size, office traffic, location, and claims history.

Typical limits are $1 million per occurrence and $2 million aggregate.

Average annual premiums in 10 states:

Note: Estimates reflect average liability pricing for SaaS companies. Actual costs vary by location, endorsements, business size, and claims history.

Fidelity Bonds

Fidelity bonds protect SaaS companies if an employee commits theft, fraud, or data misuse. The average cost is about $82 per month.

If staff have access to client billing portals, code repositories, cloud databases, or internal finance systems, this policy can reimburse losses from dishonest activity. Pricing depends on employee access level, controls, and bond value.

Average annual premiums in 10 states:

Note: Estimates represent average fidelity bond costs. Actual rates vary by employee exposure, controls, and coverage limits.

Workers’ Compensation Insurance

Workers’ compensation insurance for SaaS companies averages around $45 per month and applies when employees are injured or develop work-related conditions.

If a developer experiences repetitive strain, a support agent suffers workstation injury, or an employee slips in the office, workers’ comp can help cover medical care and part of lost wages. Rates depend on payroll totals, job functions, and claims history. Some states require coverage even for a single employee.

Average annual premiums in 10 states:

Note: Estimates reflect workers’ comp averages for SaaS payroll structures. Actual pricing varies by state rules, payroll audits, and job classifications.

Commercial Auto Insurance

Commercial auto insurance applies if employees drive for business purposes such as client meetings, conferences, data center access, or equipment transport. The average cost is about $200 per month.

Coverage applies to accidents, damage, liability claims, or theft involving business use vehicles. Rates vary based on mileage, number of vehicles, driver records, and whether personal vehicles are used for work.

Average annual premiums in 10 states:

Note: Estimates reflect blended averages for SaaS vehicle usage. Actual pricing varies by mileage, driver history, and vehicle type.

SaaS Company Business Insurance Costs By Provider

SaaS Company business insurance costs will vary greatly depending on the insurance carrier. Use the table below to find average costs across different providers.

Note: These estimates are based on average annual premiums for SaaS and technology companies across both small and large agencies and reflect common coverage mixes (technology errors and omissions, cyber liability, general liability, and optional policies like fidelity bonds and workers’ compensation); actual premiums will vary by company size, revenue, data sensitivity, security controls, claims history, and coverage limits

What Factors Impact Your SAAS Insurance Costs?

SaaS insurance premiums are carefully calculated by underwriters based on your business’s risk profile. From the type of software you provide, how much sensitive data you handle, your security practices, business size, and past claims all affect how much you’ll pay for coverage.

Services Offered

The kind of services you provide impact insurance costs for an SaaS business; those with subscription models have different risk profiles compared to those that provide customer consultations or implementation services. Tangentially, offering implementation services rather than continually managing client infrastructure brings with it different risks, and therefore, different premiums.

Type Of Saas Product

The kind of software you offer affects your insurance costs. A SaaS company that provides basic tools like note-taking apps may pay less than one offering financial, healthcare, or legal software, which carry higher risks due to sensitive data and compliance rules.

Data Sensitivity

If your software collects and stores personal, financial, or health data, your risk level is higher. This means you may need stronger cyber liability coverage, which can increase your insurance premiums.

Business Location

Where your company is based matters too; if you’re located in a high-crime area or a region with a high rate of lawsuits, your insurance, especially for property or general liability, may cost more. Lower-risk areas can lead to lower premiums. Different states have varying data privacy laws that can require stricter operations or higher insurance, such as the privacy regulations in California. SaaS businesses operating internationally may need to cover their risk profile across multiple locations.

Company Size And Revenue

A larger company with more employees, clients, and revenue usually faces more exposure to legal claims or data breaches. Startups with only $150,000 in annual revenue and 300 users have different risk profiles compared to companies with over 50,000 users who generate over $2 million in annual revenue. Why? More users and bigger contracts can mean higher risks, so insurers may charge more to cover you.

Hardware And Office Equipment

Even though you run a software business, your office may still have valuable computers, servers, or other equipment. The more expensive your hardware and workspace, the more you might pay for commercial property insurance.

Claims History

If your company has filed many insurance claims in the past, your premiums may go up because insurers see you as a higher risk. If your company has a history of IP disputes or compromised client data, either of which resulted in E&O claims, this can stick with your business for years, resulting in higher premiums. A clean claims record can help you qualify for lower rates or discounts.