Technology Industry Insurance Guide: 17-State Comparison
Technology companies face a unique insurance landscape dominated by cyber risk, intellectual property concerns, and professional liability exposures. Unlike traditional industries where workers’ compensation drives costs, tech companies typically spend more on cyber liability, errors & omissions, and employment practices coverage. This guide compares technology insurance requirements and costs across 17 major U.S. markets.
Executive Summary: State Rankings for Technology
Overall Technology Insurance Cost Ranking
| Rank | State | Cost Index | Key Factor |
|---|---|---|---|
| 1 | California | 165 | CCPA, litigation, labor laws |
| 2 | New York | 155 | SHIELD Act, employment laws |
| 3 | Illinois | 140 | BIPA (biometric), litigation |
| 4 | New Jersey | 135 | Privacy laws, employment |
| 5 | Massachusetts | 130 | Data protection, employment |
| 6 | Washington | 120 | Privacy laws, labor costs |
| 7 | Colorado | 112 | Privacy law, growing market |
| 8 | Pennsylvania | 105 | Moderate |
| 9 | Florida | 102 | Growing tech hub |
| 10 | Michigan | 100 | Baseline/average |
| 11 | Minnesota | 98 | Moderate regulations |
| 12 | Ohio | 95 | Business-friendly |
| 13 | Arizona | 92 | Tech growth, low regulation |
| 14 | Virginia | 88 | Data center hub, VCDPA |
| 15 | North Carolina | 85 | Growing tech, low costs |
| 16 | Georgia | 82 | Business-friendly |
| 17 | Texas | 78 | Lowest overall |
Index: 100 = national average. Based on combined cyber, E&O, EPLI, and D&O costs.
Cyber Liability Insurance
State Privacy Laws Driving Costs
Cyber liability costs correlate strongly with state privacy regulations:
| Tier | States | Privacy Law Status | Cost Impact |
|---|---|---|---|
| Tier 1 - Highest | CA, NY | Comprehensive (CCPA/CPRA, SHIELD) | +40-60% |
| Tier 2 - High | IL, CO, VA | Comprehensive or significant laws | +20-35% |
| Tier 3 - Moderate | WA, NJ, MA, MN | Notable requirements | +10-20% |
| Tier 4 - Lower | All others | Basic notification only | Baseline |
Comprehensive State Privacy Laws
| State | Law | Effective | Key Requirements | Insurance Impact |
|---|---|---|---|---|
| California | CCPA/CPRA | 2020/2023 | Broadest consumer rights, private right of action | Highest impact |
| Virginia | VCDPA | 2023 | Consumer rights, no private action | Moderate impact |
| Colorado | CPA | 2023 | Consumer rights, universal opt-out | Moderate impact |
| Illinois | BIPA | 2008 | Biometric data, private right of action | High for affected companies |
| New York | SHIELD | 2020 | Security requirements, breach notification | High impact |
Cyber Liability Rate Comparison
$2M limits, $25K deductible, technology company with 50 employees:
| State | Annual Premium | vs. Average | Key Factors |
|---|---|---|---|
| Texas | $18,000 | -40% | Minimal state requirements |
| Georgia | $19,000 | -37% | Business-friendly |
| North Carolina | $20,000 | -33% | Low regulation |
| Arizona | $21,000 | -30% | Growing but unregulated |
| Virginia | $22,000 | -27% | VCDPA (no private action) |
| Ohio | $23,000 | -23% | Moderate |
| Minnesota | $24,000 | -20% | Some requirements |
| Florida | $25,000 | -17% | Growing tech sector |
| Michigan | $26,000 | -13% | Moderate |
| Pennsylvania | $27,000 | -10% | Moderate |
| Colorado | $29,000 | -3% | CPA requirements |
| Washington | $31,000 | +3% | State privacy push |
| Massachusetts | $33,000 | +10% | Data protection rules |
| New Jersey | $35,000 | +17% | Consumer protection |
| Illinois | $38,000 | +27% | BIPA litigation |
| New York | $42,000 | +40% | SHIELD Act |
| California | $48,000 | +60% | CCPA/CPRA litigation |
Illinois BIPA Special Consideration
The Illinois Biometric Information Privacy Act (BIPA) creates unique exposure:
BIPA Requirements:
- Written consent before collecting biometric data
- Data retention and destruction policies
- Private right of action (rare for privacy laws)
- Statutory damages: $1,000-$5,000 per violation
Insurance Impact:
- Companies using facial recognition, fingerprints, etc.
- Class action exposure (landmark settlements $100M+)
- Some cyber policies exclude BIPA
- Separate BIPA coverage may be needed
Technology Errors & Omissions (E&O)
Understanding Tech E&O
Technology E&O (Professional Liability) covers:
- Software failures or defects
- Service delivery failures
- Missed deadlines
- Unintended system damage
- IP infringement (in some policies)
Tech E&O Rate Comparison
$2M limits, software/SaaS company, $5M annual revenue:
| State | Annual Premium | vs. Average | Notes |
|---|---|---|---|
| Texas | $22,000 | -35% | Low litigation |
| Georgia | $24,000 | -29% | Business-friendly |
| North Carolina | $25,000 | -26% | Moderate |
| Arizona | $26,000 | -24% | Growing tech |
| Virginia | $27,000 | -21% | Tech corridor |
| Ohio | $28,000 | -18% | Moderate |
| Minnesota | $29,000 | -15% | Moderate |
| Florida | $30,000 | -12% | Growing |
| Michigan | $31,000 | -9% | Moderate |
| Colorado | $32,000 | -6% | Tech hub |
| Pennsylvania | $33,000 | -3% | Moderate |
| Washington | $35,000 | +3% | Tech hub, litigation |
| Massachusetts | $37,000 | +9% | Tech hub |
| Illinois | $40,000 | +18% | Litigation |
| New Jersey | $42,000 | +24% | Consumer protection |
| New York | $45,000 | +32% | High litigation |
| California | $52,000 | +53% | Highest litigation |
Contract Requirements Affecting E&O
Tech companies often face contractual insurance requirements:
| Client Type | Typical E&O Requirement | Limit Requirements |
|---|---|---|
| Enterprise Customers | Almost always | $2M-$10M |
| Government Contracts | Required | $1M-$5M |
| Mid-Market B2B | Usually | $1M-$2M |
| SMB Customers | Sometimes | $1M |
| Consumer/B2C | Rarely | N/A |
Directors & Officers (D&O) Insurance
D&O for Tech Companies
D&O insurance is critical for tech companies due to:
- Investor requirements (VC, PE)
- Securities exposure (public companies)
- Employee equity compensation
- Rapid growth and pivots
- M&A activity
D&O Rate Comparison
$3M limits, tech company, Series A/B funded, 75 employees:
| State | Annual Premium | vs. Average | Notes |
|---|---|---|---|
| Texas | $35,000 | -30% | Business-friendly |
| Georgia | $37,000 | -26% | Low regulation |
| North Carolina | $38,000 | -24% | Moderate |
| Arizona | $39,000 | -22% | Growing |
| Virginia | $40,000 | -20% | Moderate |
| Ohio | $41,000 | -18% | Moderate |
| Minnesota | $42,000 | -16% | Moderate |
| Florida | $44,000 | -12% | Growing |
| Michigan | $45,000 | -10% | Moderate |
| Colorado | $47,000 | -6% | Tech hub |
| Pennsylvania | $48,000 | -4% | Moderate |
| Washington | $52,000 | +4% | Tech concentration |
| Massachusetts | $55,000 | +10% | Tech hub |
| Illinois | $58,000 | +16% | Litigation |
| New Jersey | $60,000 | +20% | Securities exposure |
| New York | $65,000 | +30% | Financial center |
| California | $72,000 | +44% | Highest concentration |
D&O Requirements by Funding Stage
| Stage | D&O Required? | Typical Limits | Notes |
|---|---|---|---|
| Pre-Seed/Bootstrap | Rarely | N/A | Personal assets at risk |
| Seed | Often | $1M-$2M | Investor requirement |
| Series A | Almost always | $2M-$5M | Standard term sheet |
| Series B+ | Always | $5M-$10M+ | Increasing limits |
| Pre-IPO | Always | $10M-$25M | Securities exposure |
| Public | Always | $25M-$100M+ | SEC requirements |
Employment Practices Liability (EPLI)
Tech Industry EPLI Exposures
Technology companies face elevated EPLI risks:
- Equity compensation disputes - Stock option issues
- Discrimination claims - Diversity concerns in tech
- Harassment - #MeToo impact
- Wrongful termination - Rapid hiring/firing
- Wage and hour - Exempt status disputes
- Non-compete enforcement - State law variations
EPLI Rate Comparison
$2M limits, tech company, 100 employees:
| State | Annual Premium | vs. Average | Key Factors |
|---|---|---|---|
| Texas | $25,000 | -38% | At-will employment |
| Georgia | $27,000 | -33% | Right-to-work |
| North Carolina | $28,000 | -30% | Right-to-work |
| Arizona | $29,000 | -28% | Business-friendly |
| Virginia | $30,000 | -25% | Moderate |
| Ohio | $32,000 | -20% | Moderate |
| Florida | $33,000 | -18% | Moderate |
| Michigan | $35,000 | -13% | Moderate |
| Minnesota | $36,000 | -10% | Some protections |
| Pennsylvania | $38,000 | -5% | Moderate |
| Colorado | $40,000 | 0% | Baseline |
| Washington | $45,000 | +13% | Strong labor laws |
| Massachusetts | $48,000 | +20% | Employee protections |
| Illinois | $52,000 | +30% | Strong protections |
| New Jersey | $55,000 | +38% | Employee-friendly |
| New York | $62,000 | +55% | Very protective |
| California | $75,000 | +88% | Strongest protections |
California-Specific EPLI Considerations
California’s employment laws create unique tech exposures:
- PAGA claims - Private attorney general actions
- Meal/rest break - Strict requirements
- Independent contractor - AB5 classification issues
- Non-compete invalidity - Cannot enforce
- Pay transparency - Salary disclosure requirements
- COVID protocols - Ongoing requirements
Workers’ Compensation for Tech
Low-Risk but Not Zero
Tech companies enjoy low workers’ comp costs but still need coverage:
| State | Rate per $100 Payroll | $100K Salary Cost | Notes |
|---|---|---|---|
| Texas | $0.12 | $120 | Optional (but get it) |
| Arizona | $0.14 | $140 | Low rates |
| Virginia | $0.15 | $150 | Competitive |
| Georgia | $0.16 | $160 | Low |
| North Carolina | $0.16 | $160 | Low |
| Florida | $0.18 | $180 | Moderate |
| Ohio | $0.18 | $180 | BWC |
| Colorado | $0.19 | $190 | Moderate |
| Minnesota | $0.20 | $200 | Moderate |
| Michigan | $0.22 | $220 | Moderate |
| Pennsylvania | $0.24 | $240 | Moderate |
| Washington | $0.08 | $80 | L&I (very low for tech) |
| Illinois | $0.28 | $280 | Higher |
| Massachusetts | $0.26 | $260 | Regulated |
| New Jersey | $0.32 | $320 | Higher |
| New York | $0.35 | $350 | Higher |
| California | $0.38 | $380 | Highest |
Remote Work Considerations
Tech’s remote work prevalence creates WC complexity:
- Multi-state exposure - Employees in multiple states
- Home office injuries - Covered in most states
- Travel exposure - Company-directed travel
- Classification - Remote vs. office rates
General Liability for Tech Companies
Premises Operations (Lower Exposure)
Tech companies typically have lower GL exposure:
| State | Rate per $1,000 Revenue | $5M Revenue Cost | Notes |
|---|---|---|---|
| Texas | $2.00 | $10,000 | Low litigation |
| Georgia | $2.10 | $10,500 | Low |
| North Carolina | $2.20 | $11,000 | Moderate |
| Arizona | $2.25 | $11,250 | Low |
| Virginia | $2.30 | $11,500 | Moderate |
| Ohio | $2.40 | $12,000 | Moderate |
| Minnesota | $2.50 | $12,500 | Moderate |
| Colorado | $2.60 | $13,000 | Moderate |
| Florida | $2.70 | $13,500 | Moderate |
| Michigan | $2.80 | $14,000 | Moderate |
| Pennsylvania | $2.90 | $14,500 | Moderate |
| Washington | $3.10 | $15,500 | Moderate |
| Massachusetts | $3.30 | $16,500 | Higher |
| Illinois | $3.60 | $18,000 | Higher |
| New Jersey | $3.80 | $19,000 | Higher |
| New York | $4.20 | $21,000 | Higher |
| California | $4.80 | $24,000 | Highest |
Media and Intellectual Property Liability
Coverage for Content and IP Risks
Tech companies may need media/IP coverage for:
- Website content liability
- App store descriptions
- Marketing materials
- User-generated content
- IP infringement claims
Media Liability Rates
$1M limits, content-focused tech company:
| State | Annual Premium | Notes |
|---|---|---|
| Most states | $5,000-$10,000 | Standard rates |
| California | $12,000-$18,000 | Higher litigation |
| New York | $10,000-$15,000 | Media center |
| Illinois | $8,000-$12,000 | Moderate |
Total Insurance Costs: Technology Scenarios
Scenario 1: Early-Stage Startup (Seed, 10 employees)
| State | Cyber | E&O | EPLI | WC | GL | Total |
|---|---|---|---|---|---|---|
| Texas | $6,000 | $8,000 | $5,000 | $600 | $2,500 | $22,100 |
| Georgia | $6,500 | $8,500 | $5,500 | $800 | $2,600 | $23,900 |
| Arizona | $7,000 | $9,000 | $6,000 | $700 | $2,800 | $25,500 |
| Colorado | $9,500 | $11,000 | $8,000 | $950 | $3,200 | $32,650 |
| Washington | $10,000 | $12,000 | $9,000 | $400 | $3,800 | $35,200 |
| New York | $14,000 | $15,000 | $12,500 | $1,750 | $5,200 | $48,450 |
| California | $16,000 | $18,000 | $15,000 | $1,900 | $6,000 | $56,900 |
Scenario 2: Growth-Stage SaaS (Series B, 75 employees)
| State | Cyber | E&O | EPLI | D&O | WC | GL | Total |
|---|---|---|---|---|---|---|---|
| Texas | $22,000 | $28,000 | $22,000 | $40,000 | $4,500 | $12,000 | $128,500 |
| Virginia | $26,000 | $32,000 | $27,000 | $45,000 | $5,625 | $13,800 | $149,425 |
| Colorado | $35,000 | $38,000 | $36,000 | $52,000 | $7,125 | $15,600 | $183,725 |
| Washington | $37,000 | $42,000 | $40,000 | $58,000 | $3,000 | $18,600 | $198,600 |
| Massachusetts | $40,000 | $44,000 | $43,000 | $62,000 | $9,750 | $19,800 | $218,550 |
| New York | $50,000 | $54,000 | $56,000 | $72,000 | $13,125 | $25,200 | $270,325 |
| California | $58,000 | $62,000 | $68,000 | $80,000 | $14,250 | $28,800 | $311,050 |
Scenario 3: Enterprise Software Company (200 employees, $50M revenue)
| State | Cyber | E&O | EPLI | D&O | WC | GL | Total |
|---|---|---|---|---|---|---|---|
| Texas | $65,000 | $85,000 | $55,000 | $95,000 | $12,000 | $35,000 | $347,000 |
| Virginia | $78,000 | $95,000 | $65,000 | $105,000 | $15,000 | $40,000 | $398,000 |
| Colorado | $102,000 | $112,000 | $88,000 | $125,000 | $19,000 | $45,000 | $491,000 |
| Washington | $110,000 | $122,000 | $100,000 | $138,000 | $8,000 | $54,000 | $532,000 |
| Massachusetts | $118,000 | $130,000 | $106,000 | $145,000 | $26,000 | $57,500 | $582,500 |
| New York | $148,000 | $158,000 | $137,000 | $172,000 | $35,000 | $73,500 | $723,500 |
| California | $170,000 | $182,000 | $166,000 | $190,000 | $38,000 | $84,000 | $830,000 |
Tech Hub Comparison
Major Tech Markets Analysis
| Hub | State | Total Cost Index | Talent Pool | VC Access | Recommendation |
|---|---|---|---|---|---|
| Austin | TX | 78 | Growing | Strong | Best value |
| Raleigh-Durham | NC | 85 | Strong | Moderate | Excellent value |
| Atlanta | GA | 82 | Strong | Growing | Great value |
| Phoenix | AZ | 92 | Growing | Moderate | Good value |
| Northern Virginia | VA | 88 | Strong | Strong | Good value |
| Denver/Boulder | CO | 112 | Strong | Strong | Moderate cost |
| Seattle | WA | 120 | Excellent | Strong | Higher cost |
| Boston | MA | 130 | Excellent | Excellent | Premium market |
| NYC | NY | 155 | Excellent | Excellent | High cost |
| Bay Area | CA | 165 | Best | Best | Highest cost |
Remote-First Cost Optimization
Companies can optimize by:
- Headquarters in low-cost state - TX, NC, GA for domicile
- Hire remotely - Access talent without local costs
- Manage multi-state compliance - Worth the complexity
- Review annually - Adjust as regulations change
Cost Reduction Strategies for Tech
Cyber Liability Reduction
- Security certifications - SOC 2, ISO 27001 can reduce premiums 10-20%
- MFA everywhere - Basic requirement, shows maturity
- Employee training - Documented programs help
- Incident response plan - Reduces claim severity
- Vendor management - Subprocessor agreements
E&O Cost Management
- Strong contracts - Limitation of liability clauses
- SLA management - Realistic commitments
- Documentation - Project and communication records
- Claims-made management - Prior acts coverage
EPLI Reduction
- HR documentation - Performance reviews, policies
- Management training - Harassment, discrimination
- Clear equity agreements - Stock option clarity
- Exit interviews - Identify issues early
- Consider state of incorporation - Delaware advantages
Key Takeaways for Technology Companies
- State selection significantly impacts costs - CA/NY are 2x+ TX/NC
- Privacy laws drive cyber costs - CCPA, BIPA, SHIELD add significant expense
- EPLI is often overlooked - Employment claims are common in tech
- D&O is required for fundraising - Budget early
- Remote work changes calculations - Multi-state compliance vs. cost savings
- Contract requirements matter - Enterprise sales require adequate coverage
This guide provides general information about technology insurance across 17 states. Actual costs vary based on specific product/service, revenue, claims history, and risk factors. Work with technology-specialized insurance brokers for accurate quotes.
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