Question 1

Do Texas tech startups need E&O insurance?

Accepted Answer

While Texas doesn't legally require E&O insurance, it's effectively mandatory for tech companies. Most enterprise clients require $1M–$5M in E&O coverage before signing contracts. VCs and investors also require it as a condition of funding. E&O protects against claims of software defects, missed deadlines, data loss, and professional negligence — risks that general liability doesn't cover.

Question 2

How much does cyber liability insurance cost in Texas?

Accepted Answer

Cyber liability insurance for Texas tech companies typically costs $1,500–$5,000/year for $1M in coverage. Pricing depends on annual revenue, number of records stored, security controls in place, and claims history. Companies handling healthcare or financial data pay more. A mid-size SaaS company with $5M revenue might pay $2,500–$4,000/year.

Question 3

Should Texas tech companies opt into workers' comp?

Accepted Answer

Texas is one of only two states where workers' compensation is optional. However, opting out ('non-subscribing') means employees can sue you directly for workplace injuries with no cap on damages. Most tech companies with 5+ employees find that workers' comp is cheaper than the litigation risk. The cost for office-based tech workers is relatively low — typically $0.30–$0.80 per $100 of payroll.

Texas Technology Insurance | RISKX