Companies in the consumer space—whether they’re building marketplaces, media brands, mobile apps, or physical products—face a unique blend of fast-paced growth and public exposure. When the stakes are high and customers are watching, having business insurance isn’t just about checking a box. It’s about having the right amount of protection so one lawsuit, data breach, or product recall doesn’t derail your entire company.

Underinsurance can be just as dangerous as having no insurance at all. Founders who cut corners on coverage limits to save budget might find themselves facing uncovered losses later—and those losses can be devastating.

Let’s walk through the coverages most consumer companies need, how much is typical to carry at each stage, and what makes this vertical unique when it comes to managing risk.

Common Coverage Types and Recommended Limits

Most startups, regardless of industry, will need a mix of standard coverages. Below is an example of common limits for companies across funding stages.

‍These ranges are based on typical company benchmarks found in Vouch’s coverage recommendation tool. They should be used as a starting point for budgeting, not a substitute for a custom quote.

Types of Coverage Limits

Insurance limits generally come in three forms:

• Per Occurrence: The maximum your policy will pay for a single claim.
  
• Aggregate Limit: The total your policy will pay during the policy period (usually one year).
  
• Sublimits: Smaller limits within your policy for specific risks, such as IP defense or cap table disputes under D&O.
  

Understanding these distinctions helps you ensure you’re not only covered, but covered enough.

Add-ons and Endorsements

Consumer startups often face evolving risks, and standard policies might not cover all of them out of the box. Add-ons and endorsements can fill those gaps. For example:

• Cap Table Dispute Coverage (D&O): Covers defense costs related to founder breakups or equity allocation conflicts.
  
• IP Defense (D&O): Essential if your product or brand could be accused of infringing on someone else’s idea.
  
• Social Engineering (Cyber): Protects against fraud when attackers trick your team into transferring funds.
  

These endorsements often come with their own sublimits, so be sure they’re high enough for your risk profile.

Factors That Impact How Much Coverage You Need

Insurance isn’t one-size-fits-all. Here are the most important factors that determine your required limits.

Company Stage and Size

The further you grow, the more assets you have at risk. Seed-stage startups might be fine with $1M limits, while Series C companies may need $5M+ across their D&O and Cyber coverages. Key indicators include:

• Revenue
  
• Headcount
  
• Assets (especially if you manufacture or warehouse inventory)
  
• Amount of capital raised
  

All these factors increase your exposure and the likelihood—and cost—of claims.

Industry

Consumer startups sit in one of the most exposure-heavy categories:

• Data-heavy products (e.g. marketplaces, social platforms, health and wellness apps) often need higher cyber limits due to the PII they collect.
  
• Physical products (e.g. food, wellness devices, electronics) often require substantial general liability and product liability insurance to cover bodily injury and property damage claims.
  
• Public-facing brands are more likely to face defamation or media liability lawsuits from competitors or customers.
  

Startups in media, marketplaces, VR, and social platforms especially need to be proactive in assessing these risks.

Contractual Requirements

Sometimes the amount of coverage you carry isn’t up to you. Your investors, commercial landlords, or partners might require you to carry certain policies or specific limits to do business. 

For example, your requirements may include:

• $1–2M General Liability for office leases
  
• $2–5M Cyber for partnerships involving sensitive data
  
• $1–3M D&O before closing a venture round
  

If you're scrambling to buy coverage in order to sign a deal, you're not alone. It’s one of the most common trigger points we see for startups to get insured.

Consumer-Specific Considerations for Coverage

1. Product Liability

Product Liability insurance protects against the real-world risks that physical products carry, like injury, property damage, or fires. This coverage helps pay for legal defense, settlements, and medical or repair costs tied to product-related harm. Without it, a single incident could jeopardize your runway, partnerships, or ability to go to market.

2. Vicarious Liability in Marketplaces

Marketplace platforms carry a unique risk: liability for the actions of your users. Some policies can include vicarious liability coverage to protect you if a dispute between buyers and sellers ends up in court.

4. IP Defense

Consumer startups are often brand-forward. That means you're more likely to be sued for infringing on someone else's trademark or copyright. A D&O policy with IP defense coverage can help protect your leadership team from these kinds of claims.

Tools and Resources to Estimate Coverage Needs

If you’re wondering where to start, Vouch has tools designed for this exact question.

• Use the Vouch Coverage Recommendation Tool: Input your stage and vertical to get a custom baseline for limits and policies.
  
• Start an application (no commitment): You’ll see real options and pricing in less than 10 minutes.
  
• Talk to a Vouch expert: If you’re unsure what’s right for your category, we’ll walk you through it.
  

Aligning Insurance Limits with Business Goals

Your insurance strategy should evolve with your startup. The coverage limits that made sense at Seed likely won’t be enough by the time you’re signing Series B term sheets or launching nationwide. Right-sizing your coverage protects not just your balance sheet but your board, your customers, and your reputation.

At the end of the day, insurance should give you room to grow—not keep you up at night.

This content is for informational purposes only and does not constitute an offer of insurance. Coverage is subject to underwriting, availability, and the terms, conditions, and exclusions of the applicable policy. Not all products are available in all jurisdictions. Please contact Vouch for more information.

Vouch Specialty Insurance Services, LLC (CA - 6004944 - vouch.us/legal/licenses)