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Why do education technology companies need business insurance?
The edtech industry is growing, which brings opportunities and unique risks for startups and businesses in this sector. Business insurance is key for fulfilling contract requirements and complying with state laws. It can protect your company against lawsuits due to downtime, software errors, claims of copyright infringement, and everyday accidents.
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Edtech contractors and companies can save money by comparing quotes from top insurers.
Fill out Insureon's easy online application to get free quotes and advice from a licensed agent.
What types of insurance do edtech companies need?
These policies cover common risks for education technology companies.
Technology errors and omissions insurance
Tech E&O covers lawsuits related to the performance of your edtech platform. You can often add intellectual property and media liability coverage.
BEST FOR
- Errors that impact clients
- Missed deadlines
- Compliance with client contracts
Cyber insurance
Cyber liability insurance helps edtech businesses survive data breaches and cyberattacks by paying for recovery expenses, lawsuits, and other related costs.
BEST FOR
- Client notification expenses
- Fraud monitoring services
- HIPAA violations
General liability insurance
This policy covers basic risks at an edtech business, such as accidental damage to a client's property. Bundle it with commercial property insurance for savings in a business owner’s policy.
BEST FOR
- Slip-and-fall accidents
- Damaged customer property
- Libel and slander lawsuits
Workers’ compensation insurance
Most states require workers' comp for education technology companies that have employees. It also protects sole proprietors from work bodily injury costs that health insurance might deny.
BEST FOR
- Employee medical expenses
- Disability benefits
- Legal costs from workplace injuries
Commercial auto insurance
This policy covers the cost of accidents involving a vehicle owned by an edtech business. Most states require this coverage for business-owned vehicles.
BEST FOR
- Car accidents
- Vandalism and theft
- Weather damage
Fidelity bonds
Fidelity bonds compensate your clients if an employee at your education technology business steals from them. Your clients might require you to purchase a bond.
BEST FOR
- Unlawful data access by an employee
- Unauthorized money transfers
- Other employee theft or fraud
Looking for different coverage? See more policies.
How much does edtech insurance cost?
A small edtech startup will pay less for insurance than a larger business.
Factors that affect tech company premiums include:
- Services offered, such as consulting, an edtech app, or an e-learning platform
- Business property and equipment
- Business size and annual revenue
- Types of insurance policies purchased
- Policy limits and deductibles
- Number of employees
- Claims history
How E&O insurance protects your business
View video transcript.
No, no, no! My client's network was working just fine last week!
You made a mistake, yeah, you made a mistake. You made a mistake, and it doesn't matter what you say. You missed the boat, now you will have to pay!
Actually, you have errors and omissions insurance. It covers legal costs if you make a mistake and your client sues you.
Mistake! Mistake! Ohhh, this was a mistake! Mistake! Mistake! Ohhh, this was a mistake!
You can get all the coverage your business needs by following this link. Protection is peace of mind!
How do I get education technology insurance?
It's easy to get insurance for your edtech business if you have your company information on hand. Our insurance application will ask for basic facts about your business, such as revenue and number of employees. You can buy a policy online and get a certificate of insurance with Insureon in three easy steps:
- Complete a free online application.
- Compare insurance quotes and choose policies.
- Pay for your policy and download a certificate.
Insureon's licensed agents work with top-rated U.S. providers to find the best insurance solutions for your education technology business, whether you work independently as an education consultant or hire employees.
"Everybody needs cyber [insurance], and small businesses are the most targeted."
– Holly Burton, Assistant Director, Sales
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FAQs about edtech business insurance
Review answers to frequently asked questions about education technology business insurance.
Why is business insurance important for education tech companies?
Whether you're a freelancer, a startup, or a well-established firm with employees, it's possible to make a mistake. And even if your work is flawless, a client could file a frivolous lawsuit in an attempt to recoup costs from a data breach or other incident.
Edtech companies typically need both errors and omissions insurance (E&O) and cyber insurance to protect against client lawsuits. Many insurance providers offer a package called technology errors and omissions insurance that includes both of these policies. You might also see it called tech E&O or tech professional liability insurance.
Tech E&O covers legal costs if a client sues you over your work performance or a cybersecurity breach. It can help pay for notifying affected customers, credit monitoring services, legal fees, and fines.
In addition, you might need other business insurance policies to meet contractual requirements or comply with state laws. For example, most states require workers' compensation insurance for businesses that have employees. Some contracts may include a requirement for general liability insurance to cover common third-party accidents.
Do ed tech businesses need professional liability insurance?
Professional liability insurance is another term for errors and omissions insurance. You might also see it called professional indemnity insurance.
All of these terms refer to the same type of coverage, which are necessary for the reasons listed above.
Additionally, it's important to know that errors and omissions insurance is a claims-made policy. To collect on a claim, this type of coverage must be active both when the incident occurred and when the claim was filed. However, it is possible to set a retroactive date to cover incidents that happened before you had coverage.
What insurance limits do universities typically require from ed tech vendors?
Universities, school districts, and other educational institutions often require tech E&O limits of $2 million to $5 million per occurrence for edtech vendors. They may also require you to carry general liability coverage, typically in an amount of $1 million per occurrence and $2 million aggregate.
The exact amount depends on the terms of your contract. You may see higher limits for high-risk contracts involving student data, or lower limits if your work involves less risk.
For above-average limits, you can buy commercial umbrella insurance or excess liability insurance to boost the limits on your policy.
You will likely need to include the institute as an additional insured on your policy.
Do edtech independent contractors need insurance?
Independent contractors face many of the same risks as bigger businesses, but with their own personal assets at stake. Business insurance can help cover medical expenses, legal defense costs, and expensive repairs.
Contractors may need general liability insurance to qualify for a lease or a business loan. A general liability policy can also protect your business from copyright infringement claims.
Tech E&O is also crucial, as it protects against claims that your edtech platform caused a client to lose money, or that you failed to deliver promised online learning services. It also protects consultants against accusations that their advice caused financial harm.
Though it's not required, you may want to invest in workers' comp to guard against costly medical bills from a workplace accident. Personal insurance policies usually don't cover work-related incidents, which is a big reason why contractors often buy their own coverage.
Finally, you might also need a fidelity bond to fulfill the terms of a client contract.
How do first-party and third-party cyber insurance differ?
Cyber insurance pays for incident response and recovery costs when you or your customers are affected by a data breach, cyberattack, ransomware, phishing, or other cyber incident.
There are two kinds of cyber coverage you should consider for your edtech business:
- First-party cyber insurance protects your education technology business against data breaches and cyberattacks that affect you directly, such as a DDoS attack that overwhelms your network. This is crucial coverage if you handle personally identifiable information (PII) or other sensitive customer information.
- Third-party cyber insurance provides legal protection if a client blames your education tech company for failing to prevent a data breach or cyberattack at their business.
Tech E&O insurance coverage typically includes both types of cyber insurance, along with E&O insurance to safeguard your edtech business against other lawsuits from dissatisfied clients.
What other types of insurance does an EdTech business need?
Here are some additional insurance products that cover unique risks faced by ed tech companies and consultants:
- Hired and non-owned auto insurance (HNOA) covers your legal liability if you get into an accident while driving your own vehicle for business purposes, such as driving to meet clients. It also covers rented and leased vehicles used for work.
- Business owner's policy (BOP) combines general liability coverage with commercial property insurance at a discount. It protects against common third-party lawsuits and business property damage.
- Electronic data processing (EDP) insurance covers electronic devices such as computers, storage devices, and the data they contain during a power surge, fire, natural disaster, or similar incident. Also known as computer coverage or data processing coverage, EDP insurance can help protect your business income against financial losses from data corruption or loss.
- Business income insurance, also known as business interruption coverage, offsets your lost income when your business is forced to close because of a covered peril, such as property damage. These funds help cover your normal operating expenses until you can resume business operations.
- Employment practices liability insurance (EPLI) is a type of management liability insurance that safeguards your business if you're sued by an employee over wrongful termination or other violation of employee rights. EPLI can also be added as an endorsement to a general liability policy or business owner's policy.
- Directors and officers (D&O) insurance protects your board members and officers from legal expenses if they're sued over a decision they made on behalf of the company that led to a financial loss. You can often bundle it with EPLI and other types of management insurance.
- Intellectual property (IP) insurance provides businesses with vital protection against IP disputes. It ensures valuable intangible assets are safeguarded so businesses can focus on innovation and growth instead of worrying about costly legal battles. This type of coverage is usually added as an endorsement to an E&O policy.
How can I save money on ed tech business insurance policies?
Small business owners can take several steps to save money on business insurance. You can start by comparing free insurance quotes from leading insurance companies with Insureon.
Other ways to save include combining coverages from the same provider in a cost-saving bundle, and risk management to avoid claims and subsequent hikes in your premiums.
Our licensed insurance agents can help you find affordable insurance for education consultants and edtech companies. Most small businesses can get insured and download a certificate of insurance soon after they apply for quotes.