Cyber Insurance for Startups

Cyber insurance (often called Cyber Liability) is designed for two categories of loss:

1) First-party incident costs

Costs your company incurs to respond to an incident, such as:

• Forensics and incident investigation

• Breach response and legal guidance

• Notification and call center costs

• Credit monitoring (when appropriate)

• Data restoration and system recovery

• Business interruption (when covered)

• Extortion or ransomware response (when covered)

2) Third-party liability

Claims against your company from others, such as:

• Privacy lawsuits and class actions

• Claims from customers or partners alleging failure to protect data

• Regulatory investigations and defense (where covered)

• Contractual claims tied to security failures (depending on wording)

Cyber insurance is not the same as Tech E&O, CGL, or D&O; it is specifically aimed at security, privacy, and technology incidents that create direct response costs and liability.

Cyber insurance is most relevant for:

• SaaS startups and cloud platforms

• AI startups handling sensitive inputs or outputs

• Fintech, payments, and money movement products

• Healthcare tech handling regulated data

• Marketplaces that store personal information

• Developer tools and APIs with customer data access

• Any company with employees using email, endpoints, and cloud services

Even small teams get hit with phishing, credential stuffing, business email compromise, and vendor incidents. The risk starts early and grows with customers, data volume, and integrations.

Startups usually buy cyber insurance when:

• A customer contract requires cyber coverage

• You complete a security questionnaire and cyber is requested

• You begin storing regulated or sensitive data

• You adopt SLAs, handle more enterprise customers, or expand internationally

• You want incident response support before something happens

Many founders first buy cyber insurance to close a deal, but the better reason to buy it is that incident costs can be large regardless of whether a customer requires it.

Coverage depends on the carrier and form, but common cyber coverage components include:

• Incident response and breach costs: Forensics, legal counsel specializing in privacy/breach response, notification/communications support, and credit monitoring or identity services when relevant.

• Data and system recovery: Costs to restore systems and remediate the incident, including data restoration and recovery expenses.

• Business interruption (when covered): Lost income and extra expense tied to downtime caused by a covered incident, and contingent business interruption for certain third-party outages (when included).

• Cyber extortion and ransomware (when covered): Assistance negotiating/responding to demands and costs associated with response and remediation.

• Third-party privacy and security liability: Defense costs for lawsuits alleging failure to protect data, settlements or judgments for covered claims, and coverage for certain contractual liabilities depending on wording.

• Regulatory and investigations (when covered): Defense costs for certain investigations (fines/penalties coverage varies and is often limited by law).

The most important practical point: cyber insurance is as much about access to experienced incident response resources as it is about the limit.

Cyber policies have exclusions and conditions. Common limitations include:

• Known incidents or prior events

• Fraudulent acts or intentional wrongdoing

• Failure to maintain minimum security controls as represented in the application (this is critical)

• Bodily injury and property damage (usually not cyber)

• Poor performance or failure of your product (usually Tech E&O)

• War and certain nation-state related triggers (wording varies and is important)

• Infrastructure outages not caused by a covered security event (depends on business interruption terms)

• Social engineering or funds transfer fraud (may require a specific coverage grant)

These examples are not promises of coverage, but show real-world triggers:

• A phishing attack compromises an employee inbox, leading to customer data exposure.

• Credentials are stolen and attackers access cloud infrastructure.

• Ransomware encrypts systems and stops operations.

• A vendor breach exposes your customer data and you are pulled into response and litigation.

• A misconfigured database becomes publicly accessible and triggers notification obligations.

• A business email compromise leads to fraudulent invoices or fund transfers (coverage depends on social engineering terms).

Cyber purchasing usually comes down to:

• Limit: The maximum the policy pays for covered loss.

• Retention: What you pay before coverage responds.

Key drivers for choosing limits:

• How much sensitive data you store

• Whether you process payments or financial info

• Customer requirements and procurement minimums

• Your dependency on uptime (how costly downtime is)

• Your exposure to ransomware and extortion

• Vendor concentration risk (single cloud, single data platform, key processors)

A simple approach: Start with what your biggest customers require, add headroom for first-party costs (forensics and counsel can consume limits fast), and make sure key sublimits are not too low for the scenarios you actually face.

Built for technology companies

Corgi is designed for startups that run on modern cloud infrastructure, ship quickly, and scale fast. Cyber underwriting and packaging should reflect that reality.

Coverage aligned to startup risk

Corgi focuses on the cyber risks that matter for startups: security incidents and breach response, vendor and cloud exposure, data handling and privacy liability, and business interruption needs for SaaS companies.

One stack, not one policy

Cyber often needs to be coordinated with Technology E&O, CGL, D&O, EPLI, and HNOA/fiduciary as you scale. Corgi helps startups build a clean insurance stack that matches how customers and investors evaluate risk.

Support when timing matters

Cyber is frequently requested in procurement. Corgi is built to help you get covered and provide documentation so deals do not stall.

*Important notice: Coverage is subject to underwriting approval and availability varies by jurisdiction. Nothing here constitutes a binder of insurance or a guarantee of coverage. Coverage is provided only under the terms, conditions, exclusions, and limits of an issued policy. Insurance services are provided by Corgi Insurance Services, Inc. Insurance products are underwritten and issued by Technology RRG, Inc., where permitted by law.*