Technology & IT Insurance

Q: Do I need cyber insurance if I already have professional indemnity?

Yes. Professional indemnity covers third-party claims arising from your work, but cyber insurance specifically covers first-party costs following a breach — including forensic investigation, data recovery, notification costs, regulatory fines, ransomware payments and business interruption losses. These costs can be substantial: the average cost of a data breach in the Asia-Pacific region exceeds NZD 5 million. PI and cyber complement each other but cover different scenarios.

Q: We use open-source software components — does this affect our PI cover?

Using open-source components is widespread in software development and is generally compatible with PI coverage. However, you should ensure your policy covers claims arising from third-party components incorporated into your software. Some policies include an IP infringement extension that covers copyright or licence disputes involving open-source code. Disclose your tech stack and use of open-source components to your broker when obtaining cover.

Q: Our clients are overseas — do NZ insurance policies cover international contracts?

Many NZ-issued policies can extend to cover work performed for international clients, but there may be territorial exclusions, particularly for US and Canadian jurisdictions which have their own litigation environment. If you have significant revenue from US or Canadian clients, you may need a policy with explicit US/Canada cover or specific wording to address international contracts. Always disclose the geographic split of your client base to your broker.

Q: We store client data in the cloud — does cyber insurance still apply?

Yes. Cloud storage does not transfer your liability for data breaches — if client data is compromised, even via a breach at your cloud provider, you may still face claims. Cyber insurance covers your liability and response costs regardless of where the data was stored. Some policies also include contingent business interruption cover for outages at cloud providers like AWS or Azure.

Specialist insurance for tech companies, SaaS providers and IT consultants

New Zealand's technology sector is growing rapidly, but with growth comes exposure. From Christchurch software startups to Auckland IT managed service providers, technology businesses face a unique blend of professional liability, cyber and intellectual property risks. Standard business policies are rarely sufficient — tech companies need specialist insurance that understands software failures, data breaches, system downtime and the global nature of tech contracts.

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Recommended Insurance for Technology & IT

Public Liability Insurance

Protect your business from third-party injury and property damage claims.

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Professional Indemnity Insurance

Protect your business when clients claim your advice or services caused them loss.

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Statutory Liability Insurance

Cover for unintentional breaches of New Zealand law — including regulatory investigations and fines.

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Directors & Officers Liability Insurance

Personal financial protection for the people who run your company.

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Cyber Liability Insurance

Protect your business from the financial consequences of cyber attacks and data breaches.

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Key Coverage for Technology & IT Businesses

Technology Professional Indemnity — covers claims from software failures, errors in code, IT advice and data loss
Cyber Liability Insurance — first-party and third-party cover for data breaches, ransomware and cyber incidents
Public Liability Insurance — covers physical injury or property damage at client sites or your premises
Directors & Officers Liability — protects founders and directors of tech companies
Statutory Liability Insurance — covers defence costs under the Privacy Act 2020 and Consumer Guarantees Act
Business Interruption Insurance — covers revenue loss from system downtime or cyber events

Unique Risks for Your Industry

→Software bugs or failures causing financial loss to clients
→Data breaches exposing customer personal information
→Ransomware attacks disrupting operations
→IP infringement claims over code, content or algorithms
→System downtime liability under SLA agreements

Typical Premium Range

$3,000 – $20,000+ per year depending on revenue, client contracts and data volumes

Premiums vary significantly based on your revenue, number of employees, claims history, specific activities and chosen cover levels. These figures are indicative guides — get a tailored quote for accurate pricing.

Insurance for Technology and IT Businesses

New Zealand's technology sector faces specialised liability risks that standard business policies were not designed to address. Software failures, data breaches, system downtime, and intellectual property disputes are the dominant risk themes for tech companies. Getting insurance right from the outset protects your business, reassures enterprise clients, and ensures you can respond to incidents without financial disruption.

Technology Professional Indemnity: Your Most Important Cover

Technology professional indemnity (tech PI) is a specialist form of professional indemnity insurance designed for IT businesses. Unlike standard PI, tech PI is specifically worded to cover:

Software bugs and code errors causing client financial loss
System downtime and failure to meet SLA uptime obligations
Data loss or corruption from your systems or services
Errors in IT advice, system design, or project management
Intellectual property infringement in software development

Why standard PI is often inadequate: Many standard PI policies exclude "computer systems", "software", or "technology" risks — the very risks that matter most for your business. A software company discovering its standard PI policy excludes software errors has no meaningful PI cover.

Claims-Made: Ongoing Cover Is Non-Negotiable

Tech PI operates on a claims-made basis. A client alleging your system contributed to a major financial loss two years after go-live files the claim on your current policy. Continuous cover, and run-off cover if you cease trading, are essential.

Cyber Liability Insurance: First-Party and Third-Party Protection

Cyber liability insurance is increasingly the most critical cover for technology businesses — both for their own operations and as evidence of responsible risk management that enterprise clients expect.

First-party cyber coverage covers your own losses: incident response, business interruption while systems are down, data restoration, ransomware response, and extortion.

Third-party cyber coverage covers claims by others: privacy liability from individuals whose data was breached, network security liability from businesses affected by a breach from your systems, and regulatory defence costs for Privacy Commissioner investigations.

Under New Zealand's Privacy Act 2020, a serious data breach requires mandatory notification to both the Privacy Commissioner and affected individuals. Cyber insurance covers the notification process itself.

Cyber Security Controls: What Insurers Require

NZ cyber insurers scrutinise your security posture:

Multi-factor authentication (MFA) on all email and critical systems
Endpoint detection and response (EDR) software
Regular, tested, off-network backups
Patch management processes
Staff security awareness training

Demonstrating these controls typically delivers better pricing and broader coverage.

Public Liability and D&O for Tech Companies

While tech companies face fewer physical-world liability risks, public liability insurance remains relevant for client site visits, office visitors, and hardware or devices supplied to clients.

For funded technology companies, directors and officers liability insurance is increasingly a condition of investor terms. D&O covers investor and shareholder claims alleging mismanagement, FMA or Commerce Commission investigations, employment disputes against individual executives, and claims arising from capital-raising activities.

SaaS-Specific Considerations

Software-as-a-service companies carry unique risk profiles:

Uptime SLAs create contractual liability for system outages
Multi-tenancy means a breach or outage can affect many clients simultaneously
Third-party dependencies (cloud providers, APIs) create contingent business interruption exposure

Ensure your tech PI policy responds to SLA failure claims, and that your cyber policy includes contingent business interruption for outages at cloud providers like AWS, Azure, or Google Cloud.

IP Risks in Technology

Software development involves constant use of third-party libraries, open-source components, and legacy code. IP infringement claims — alleging your software incorporates copyright-protected code or violates a patent — are a significant and growing risk. Ensure your tech PI policy includes IP infringement as part of the insuring clause.

Typical Premium Ranges

Freelance IT consultant (< $200k revenue): $2,000 – $5,000 pa
Small software company (< $1M revenue): $3,000 – $10,000 pa
SaaS company or IT MSP ($1M–$5M revenue): $8,000 – $25,000 pa
Growth-stage tech company (funded, $5M+ revenue): $15,000 – $60,000+ pa

Cyber insurance premiums add $1,500 – $10,000+ depending on data volumes and security posture.

Technology insurance is a specialist field. Work with a broker experienced in technology sector risks who can compare multiple specialist insurer options.

See: professional services insurance, cyber liability coverage, professional indemnity insurance, and small business insurance.