Common SaaS Liabilities and How Insurance Can Help

Running a software-as-a-service (SaaS) company can involve unique risks that can impact your business’s reputation, finances, and operations. SaaS businesses operate in a fast-paced, highly regulated environment. Some of the most common liabilities include:

• Data breaches and cyber attacks: Handling sensitive client data makes SaaS companies prime targets for cybercriminals. A breach can lead to regulatory fines, lawsuits, and loss of client trust.
• Service outages and downtime: If your platform experiences downtime, clients may suffer losses and hold your company responsible for damages.
• Errors and omissions (E&O): Mistakes in your software or failure to deliver promised services can result in costly legal claims.
• Intellectual property infringement: SaaS companies may face allegations of using third-party code or content without proper authorization.
• Regulatory compliance: California has strict privacy laws, such as the California Consumer Privacy Act (CCPA), increasing the risk of compliance-related penalties.

Essential Insurance Coverages for SaaS Companies

To help protect against these risks, our team recommends considering the following types of insurance:

• Cyber liability insurance covers costs related to data breaches, cyberattacks, and privacy violations, including notification expenses and legal fees.
• Technology errors and omissions (E&O) insurance helps your business if a client claims your software or services caused them financial harm due to an error or oversight.
• General liability insurance offers coverage for third-party bodily injury or property damage claims, which can arise from business operations.
• Business interruption insurance offers financial support if your operations are disrupted by a covered event, such as a cyberattack or natural disaster.

How Our Team Supports California SaaS Businesses

At Silicon Valley Risk & Insurance Services, we work closely with SaaS companies across California to assess their unique exposures and tailor insurance solutions that fit their needs. Our expertise in technology insurance helps our clients stay protected as they innovate and grow.

If you’re ready to review your coverage or have questions about protecting your SaaS business, contact us today.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.