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

Here are some of the biggest cost drivers:

• Software Type (impacts risk profile and premiums for several forms of coverage)
• Location (impacts privacy laws and regulations for your SaaS business)
• Number of employees (affects workers’ comp and liability)
• Coverage limits (impacts cyber and tech E&O)
• Property size and value (affects commercial property coverage)
• Past claims history (insurers charge more if you’ve filed claims)
• Business interruption coverage and other add-ons

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

General Liability Insurance

The average cost of general liability insurance for a SaaS company is about $30 per month.

General liability covers third-party bodily injury, property damage, and advertising injuries. For example, if a visitor trips over a power cord at your office and gets injured, this policy would help cover their medical bills and pay for your legal defense if they file a lawsuit.

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

Factors that influence the cost include the business size, location, customer traffic volume, previous claims history, and any subcontractors or additional insured endorsements.

Here’s a look at the average annual premiums for 10 different states:

Note: Estimates are modeled from blended average annual General Liability premiums for SaaS companies using sample quotes from both small and large insurance agencies and reflect SaaS-specific factors (annual revenue and customer counts, distribution of on-premises vs. cloud operations, contractual indemnity requirements, number of employees and remote-work footprint, and state-level liability trends); actual premiums will vary by insurer, coverage limits and endorsements, business size, claims history, and other business- and location-specific underwriting factors

Workers’ Compensation Insurance

The average cost of workers’ compensation insurance for a SaaS Company is around $45 per month.

Workers’ comp covers medical bills, rehabilitation, and lost wages for employees injured on the job. For example, if a software developer gets severe wrist strain from repetitive typing and needs medical treatment and time off, workers’ compensation would help cover their doctor visits and part of their lost income while they recover.

Policy limits are regulated by each state, but typically include medical costs and a percentage of lost wages without a set cap.

Premiums are influenced by the size of your payroll, the type of work employees perform, your claims history, and any implemented safety programs.

Here’s a look at the average annual premiums for 10 different states:

Note: Estimates are modeled from blended average annual Workers’ Compensation premiums for SaaS companies using sample quotes from both small and large insurance agencies and reflect SaaS-specific factors (payroll size and employee mix, remote-work vs on-site time, job classifications for tech and administrative staff, state rate levels, and regional claim frequency); actual premiums will vary by insurer, state rate filings, experience modification factor, payroll audits, workplace safety programs, and other business- and location-specific underwriting factors.

Commercial Auto Insurance

The average cost of commercial auto insurance for a SaaS company is about $200 per month.

Commercial auto insurance covers vehicles owned or used by the business for accidents, theft, vandalism, or damage. For example, if an employee is driving a company car to a client meeting and accidentally hits another vehicle, this policy would help cover the repair costs and any third-party injury or property damage claims.

Factors influencing the cost include the number and type of vehicles, how often they are used, the driving records of employees, and whether you add endorsements like hired and non-owned auto insurance (HNOA) for employee-owned vehicles.

Here’s a look at the average annual premiums for 10 different states:

Note: Estimates are modeled from blended average annual Commercial Auto premiums for SaaS companies using sample quotes from both small and large insurance agencies and reflect SaaS-specific factors (typical vehicle use for client visits or equipment transport, number of vehicles, driver records, garaging ZIP code, annual mileage, and vehicle values); actual premiums will vary by insurer, coverage limits and deductibles, fleet size and usage patterns, driver histories, and other business- and location-specific underwriting factors.

Technology Errors And Omissions Insurance

The average cost of technology errors and omissions insurance for a SaaS company is about $88 per month.

Tech E&O insurance helps protect your SaaS business if a client claims your software or service caused them financial loss because of a mistake, bug, failure to perform, or bad advice. For example, a system error on your SaaS platform causes client calendars to disappear for a full day, resulting in missed appointments and lost revenue. One of your customers sues your company for financial loss. Tech E&O insurance would help cover your legal defense costs and any payout if you’re found liable.

The cost of errors and omissions insurance depends on things like how much coverage you want, how big your business is, and the type of SaaS products or services you provide.

Here’s a look at the average annual premiums for 10 different states:

Note: Estimates are modeled from blended average annual Technology Errors & Omissions premiums for SaaS businesses using sample quotes from both small and large insurance agencies and reflect SaaS-specific factors (annual revenue and contract exposures, software delivery model, data and security practices, third‑party vendor dependencies, number of customers and employees, and state-level liability trends); actual premiums will vary by insurer, coverage limits and retroactive dates, claims history, contract wording, and other business- and location-specific underwriting factors

Cyber Insurance

The average cost of cyber insurance for a SaaS company is about $149 per month.

Cyber insurance helps protect your business if you face problems like data breaches, hacking, or other cyber attacks. It can help cover the cost of things like notifying customers, restoring lost data, hiring IT experts, and even legal fees if you’re sued after a cyber incident.

For example, if your SaaS platform is hacked, and customer data, like names, emails, and payment info, is stolen. You have to notify users, investigate the breach, and may even face legal claims from affected customers. Cyber insurance would help cover these costs, including legal fees, customer notifications, and hiring a cybersecurity team to fix the issue.

The cost of cyber insurance depends on how likely your company is to face cyber threats and how much personal data your software handles.

Here’s a look at the average annual premiums for 10 different states:

Note: Estimates are based on blended average annual Cyber Insurance premiums for SaaS companies using sample quotes from both small and large insurance agencies and reflect SaaS-specific risk drivers (annual revenue and customer base, data sensitivity and breach history, security controls and incident response plans, use of third‑party vendors, regulatory exposures, and state-level claim trends); actual premiums will vary by insurer, coverage limits and sublimits, retention and exclusions, contract requirements, security posture, and other business- and location-specific underwriting factors.

Fidelity Bonds

The average cost of fidelity bonds for a SaaS company is about $82 per month.

Fidelity bonds are a type of insurance that protects your business if an employee steals money, data, or valuable property from you or your clients. For example, if an employee at your SaaS company has access to a client’s billing system and secretly transfers money into their own account. The client discovers the fraud and demands repayment.

A fidelity bond would help cover the loss caused by the employee’s dishonest actions. The cost of a fidelity bond is typically a small percentage of the bond amount.

Here’s a look at the average annual premiums for 10 different states:

Note: Estimates are modeled from blended average annual Cyber Insurance premiums for SaaS companies using sample quotes from both small and large insurance agencies and reflect state-level risk drivers (company revenue and customer base, data sensitivity, security controls and incident response readiness, third‑party vendor exposure, regulatory environment, and local claim trends); actual premiums will vary by insurer, coverage limits and sublimits, retention and exclusions, contract requirements, security posture, and other business- and location-specific underwriting factors.

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.

How To Lower Your SAAS Insurance Costs

Running a SaaS business is expensive, but your insurance bill doesn’t have to break the bank. While you can’t eliminate the need for coverage, you can take smart steps to reduce your premiums without sacrificing protection. Here are some practical ways to lower your SaaS insurance costs:

1. Bundle Your Policies

SaaS companies need protection against bugs, errors in their coding, or missed deadlines, so professional liability is a must-have. But they also need cyber liability to protect against ransomware attacks or data breaches, intellectual property coverage, and possible media liability depending on services.

To keep SaaS insurance costs low, most insurers offer a Business Owner’s Policy (BOP) that combines general liability and property insurance at a lower rate than if you bought them separately. If you also need workers’ compensation, bundling both through the same provider can lead to additional discounts. Not only does this simplify your paperwork, but it also makes your coverage more cost-efficient.

2. Pay Annually for SaaS Premiums

Insurance companies often reward businesses that commit to a policy long-term. Ask your provider if they offer multi-year discounts for signing a two- or three-year agreement instead of renewing annually.

You might also qualify for lower rates if you pay your premium in full instead of in monthly installments. For example, paying a one-time annual premium can save an average of 10% on SaaS business insurance costs as compared to monthly installments which often include processing fees.

3. Implement Safety Measures and Review Policies Regularly

Accidents and mistakes can be expensive for both your SaaS company and your insurer. Taking steps to reduce risk in your daily operations can help prevent claims and lower your insurance premiums over time. For example, training your team on cybersecurity best practices, safely handling customer data, using multi-factor authentication, keeping software up to date, and setting clear internal policies can all help avoid issues like data breaches or client errors.

If you implement new safety measures like enhanced testing protocols or SOC 2 security certs, review your policy and see if you can qualify for additional discounts from your insurance provider.

4. Create A Safe Working Environment

A strong safety program can help reduce workers’ compensation costs for your SaaS business. This means training your team on how to set up safe work-from-home setups, avoid repetitive strain injuries (like wrist pain from typing), take regular breaks, and use proper posture. If your team works safely and avoids injuries, you’ll file fewer insurance claims, which can help lower your workers’ comp premiums over time.

5. Change Your SaaS Insurance Deductible

Your deductible is the amount you pay out of pocket before insurance coverage kicks in. Choosing a higher deductible can significantly reduce your monthly premiums. Higher professional liability deductibles for SaaS companies can reduce premiums by an average of 31%. Just make sure you can comfortably cover that amount if a claim arises.

By taking these steps, you not only save money but also make your SaaS business a safer and more resilient business.