Tech startup insurance in Florida comes down to three policies and one gap. Professional liability (errors and omissions, or E&O) covers the money a customer loses when your software or service fails. General liability, written correctly, covers injury and damage if anything you sell is physical. Cyber covers the data you hold. The gap is AI, and most of the market has not caught up to it yet.
I write these for Gulf Coast founders out of Sarasota. This is what I ask a founder, what I see go wrong, and where AI changes the answer.
Professional liability is the big one
General liability does not cover mistakes or failures in your software or tech product. It was not written for that. E&O is the policy that pays for the financial loss a customer suffers because of what your software or tech does.
If a bug in your platform costs a customer a week of orders, that is an E&O claim. If you ship code that corrupts a client's records, same policy. A startup with only general liability has nothing standing behind the thing it actually sells.
General liability, and the line most tech quotes leave off
General liability is still worth having, and it is often quoted wrong for tech. Products and completed operations gets left off the quote. That is the part of general liability that responds when something you made causes harm after it leaves your hands.
Here is where it matters. If a physical product malfunctions, it can cause bodily injury or fire damage to a customer's facility. That is a general liability claim, not an E&O claim. A hardware device, a sensor, a charger, a piece of equipment you install: if it can start a fire, products and completed operations is the coverage that answers.
The quoting mistake I see online most
A company has more than one class code. It buys a cheap policy written on one of them. A claim comes in on the exposure that was never on the policy, and that one claim can end the business.
The fix costs more. General liability with products and completed operations, plus E&O, is a bigger premium than a one-line online quote. I wrote up a real case of this with a safety consulting firm, where one quote covered one of its three lines of work: the cheaper quote that leaves you out to dry. Different industry, same mechanism.
Why founders actually buy, and when
Most startups buy because somebody asked for proof of insurance. It is a line in a customer contract. More founders now buy earlier, to protect themselves and to show they run the company responsibly.
Waiting until the first customer is common because there is no cash yet. But a complete policy in hand helps win that first customer. Founders with good mentors or funding tend to buy up front. If you are waiting on a contract to force the issue, ask for the quote before the contract arrives, so the certificate is ready the day it is requested.
Cyber: two questions I ask
I ask what data you will store, specifically personal identifiable information, and what safeguards you have around it. That sets the cyber limit and the price.
Where bodily injury could come in, I also ask about AI use. Is the harm purely financial, or could someone get hurt? That question decides which policy is even in play, and it is the one that most startups have not thought about.
How to lower claims and premiums
- Follow the carrier's recommendations. They are the underwriter's checklist, and the checklist sets the price.
- Have outside professionals certify your security instead of grading yourself.
- Make sure vendors carry insurance, and vet them before they touch your systems.
- Separate networks where you can, so one compromised login does not reach everything.
Vendor risk is not theoretical. Target told reporters in 2014 that the attackers got in with a third-party vendor's credentials, and Krebs on Security reported the vendor was an HVAC contractor. The lesson is not whose fault it was. The lesson is that your vendors' access is your risk.
AI is the main new exposure
Founders are building fast with AI. Mark Cuban said on the TBPN podcast earlier this year that "Software is dead because everything's going to be customized to your unique utilization," as Benzinga reported it. Whether or not you agree, startups are building products where AI makes decisions, and the insurance market is working out who pays when those decisions go wrong.
Today, cyber is doing the most to cover AI, but it covers data and dollars. As I told CNBC, cyber was built for data and dollars, not for people getting hurt. I wrote the long version in CNBC asked about AI risk.
Two things are happening at once.
Exclusions are arriving on general liability. Verisk's ISO program published generative AI exclusion endorsements for the general liability form. As Insurance Journal reported, citing Verisk's descriptions, CG 40 47 excludes bodily injury, property damage, and personal and advertising injury arising out of generative AI. CG 40 48 excludes only personal and advertising injury. CG 35 08 excludes bodily injury and property damage arising out of generative AI for the products and completed operations coverage. Carriers are increasingly filing to use them. Insurance Business reports the trigger is any connection to AI, not how much of the work AI touched. Whether your policy carries one is a question for your declarations and forms, not a guess. That makes the products and completed operations point above matter more, not less.
Affirmative AI coverage is starting to exist. A few specialist markets now sell it. Armilla launched an AI liability policy backed by Lloyd's underwriters in April 2025 (Hunton). Munich Re's aiSure covers AI performance failures. Testudo, a Lloyd's coverholder, offers a generative AI liability product (Coverager). I am naming them as examples of what exists. That is not a statement that I place with them.
Where I expect this to go: financial-loss AI coverage becomes routine and priced like cyber. Bodily injury from AI is the hard line. Expect tight underwriting, low sub-limits, and a requirement that a human reviews what the AI produces before it reaches a person.
That is why a startup needs an agent who understands AI insurance. Which markets exist, and what is on the exclusion schedule of the policy you already hold.
What to do this week
1. Read your current general liability form for any generative AI endorsement. 2. Ask whether products and completed operations is on the quote, and what it excludes. 3. List every service and product you sell, then check each one against the classes on the policy. 4. Decide whether any of your AI output could physically hurt someone. If it could, tell your agent before the quote, not after the claim.
If you want a second set of eyes, send me your current policy or quote. I will tell you what it covers and what it leaves off. See also our pages on professional liability, cyber liability, commercial general liability and insurance for AI use, and the earlier post on AI exclusions in cyber policies.
This is general information, not a quote or a promise of coverage. Coverage depends on the policy form and on underwriting.
Sources
- Don Jergler, "Insurer Interest in AI Exclusions Growing as Risk Becomes Omnipresent," Insurance Journal, July 22, 2026 (ISO forms CG 40 47, CG 40 48, CG 35 08, as paraphrased by Verisk).
- Kevin Williams, "Anthropic IPO filing warns some risks may be uninsurable. AI coverage will be issue for every company," CNBC, October 28, 2026.
- Brian Krebs, "Target Hackers Broke in Via HVAC Company," Krebs on Security, February 5, 2014 (updated February 6, 2014).
- Rishabh Mishra, Benzinga report on Mark Cuban's TBPN interview, republished on Yahoo Finance, February 18, 2026 (secondary coverage; the original podcast was not checked).
- Insurance Business, "ISO's generative AI exclusion is already on thousands of CGL policies" (2026).
- Hunton Insurance Recovery Blog, "Affirmative artificial intelligence insurance coverages emerge" (Armilla, launched April 30, 2025).
- Munich Re, "aiSure FAQ".
- Coverager, "Testudo expands AI liability capacity with Atrium and QBE" (2026).
Get a quote on this coverage.
Ten minutes on the application. Dennis reads it himself and responds the same business day in most cases.
Start the application →Hendrickson Insurance, (941) 957-2796, dennis@hendricksonins.com, FL License E095547.
Coverage descriptions are general. Actual coverage is governed by the terms, conditions, and exclusions of the issued policy. Availability varies by carrier and by state.
