HealthTech founders are building at the edge of innovation, blending healthcare, software, hardware, and data in ways that challenge traditional risk models. But while your company may be rethinking care delivery or diagnostics, the need for comprehensive business insurance remains constant.

Having the right insurance isn’t just about checking a box. It’s about building a multi-layered safety net that protects your team, your product, your investors, and your mission. Different types of insurance protect against different threats—from lawsuits over product performance to cyberattacks or IP disputes. 

And in HealthTech, there are also unique risks—like handling Protected Health Information (PHI) or deploying AI for diagnostics—that demand specialized protection.

Recommended Coverages

While every company is different, the following coverage types are generally essential for HealthTech companies:

Directors & Officers (D&O)

What it covers: D&O insurance protects your company’s leadership—founders, executives, and board members—from personal financial loss in the event they’re sued for decisions made on behalf of the company. It also covers the company itself when it’s named in those same claims.

HealthTech example: A HealthTech founder is sued by a former employee alleging misrepresentation during fundraising. The D&O policy helps cover legal defense and any resulting settlement.

Errors & Omissions (E&O)

What it covers: E&O insurance (also called Professional Liability) covers your company if a customer claims financial harm from an error or oversight in your product or service—even if that claim has no merit.

HealthTech example: Your AI-powered diagnostic tool delivers inconsistent results due to a bug. A hospital partner sues your company for delays in treatment. E&O insurance covers defense costs and settlements.

Cyber

What it covers: Cyber insurance helps cover costs related to data breaches, ransomware, and other cyber incidents. It can include forensics, customer notification, credit monitoring, and legal support.

HealthTech example: A phishing attack exposes patient data stored in your app. Cyber insurance helps cover legal costs, regulatory fines, and breach response.

General Liability

What it covers: General Liability protects your company from claims involving bodily injury, property damage, and personal or advertising injury.

HealthTech example: A visiting partner trips over cables during a demo and breaks a wrist. General Liability covers the resulting medical and legal costs.

Business Property

What it covers: Business Property insurance protects your company’s owned physical assets like laptops, lab equipment, and furniture from risks such as fire, theft, or water damage.

HealthTech example: A pipe bursts and floods your testing lab, damaging your diagnostic hardware. Business Property insurance pays for repairs or replacement.

Employment Practices Liability (EPLI)

What it covers: EPLI covers you against claims made by employees, such as discrimination, harassment, wrongful termination, or retaliation.

HealthTech example: A former employee files a claim alleging bias in promotion decisions. EPLI helps pay for legal defense and resolution costs.

Additional Coverages

Some risks are less universal but still relevant depending on your model and scale. These include:

• AI Insurance: Covers liability for harm caused by AI-driven tools or decisions.
  
• Crime: Protection against employee theft, fraud, and embezzlement.
  
• Fiduciary Liability: Covers claims related to the mismanagement of employee benefit plans.
  
• Hired & Non-Owned Auto (HNOA): Covers bodily injury and property damage caused by employees using personal or rented vehicles for work.
  
• Media Liability: Covers claims of libel, slander, copyright infringement, or false advertising in marketing or content distribution.
  

HealthTech-Specific Considerations for Coverage

Because HealthTech companies blend tech and healthcare, they face specialized exposures that general insurance policies may not cover. Vouch can help you find endorsements to address these risks.

Medical Malpractice

What it covers: Extends protection to clinical claims typically reserved for healthcare professionals.

Why HealthTech needs it: If your software or device supports clinical decision-making or interacts with patient treatment plans, you may be held accountable for patient outcomes—even if you're not practicing medicine directly.

IP Defense

What it covers: Helps cover legal costs if a company officer is sued for allegedly infringing on a patent, trademark, or trade secret.

Why HealthTech needs it: HealthTech companies often develop proprietary algorithms or hardware. IP disputes with competitors can escalate quickly—and target leadership personallyhealthtech.

Cap Table Dispute Sublimit

What it covers: Helps cover legal costs related to disputes over equity ownership or founder dilution.

Why HealthTech needs it: As HealthTech companies raise funding or grant equity to advisors and clinicians, ownership questions can lead to legal conflict.

Exclusions

An exclusion is something your policy specifically does not cover. Common exclusions in business insurance policies include:

• Prior acts or known events
  
• Contract disputes (unless specifically endorsed)
  
• Criminal activity
  
• Fines or penalties (in many cases, particularly civil)
  

For example, a Cyber policy may not cover regulatory fines unless it’s explicitly included, and an E&O policy may exclude hardware liability unless customized for HealthTech needs.

Importance of Scaling Coverage

Your coverage needs today will not be the same tomorrow. Insurance should evolve as your company grows:

• New contracts often require specific policies or higher limits.
  
• New product launches may introduce clinical or regulatory risks.
  
• Fundraising rounds increase your valuation—and liability exposure.
  
• Hiring employees in new states introduces legal and compliance complexity.
  

Review your policies regularly and adjust your limits and coverages accordingly.

For HealthTech companies, insurance isn’t just a compliance exercise—it’s a strategic advantage. By investing in the right types of coverage, you’re not only protecting your balance sheet—you’re enabling your company to scale confidently, win contracts, and attract the talent and capital needed to grow.

Insurance that understands the dual nature of HealthTech—its speed and its stakes—isn’t optional. It’s essential.

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)