Practical Guide · 8 min read
How to Read Insurance Requirements in SaaS Contracts
The insurance section of a SaaS MSA is usually three paragraphs that quietly drive thousands of dollars of premium. Here's how to read them.
About the author
Written by Reza.
Clause 1 — Required policies + limits
Lists each policy type the customer requires and the minimum per-occurrence and aggregate limits. Common asks: $1M/$2M CGL, $5M Cyber, $5M Tech E&O, $5M Umbrella.
Clause 2 — Additional Insured + Waiver of Subrogation
The customer wants to be named as Additional Insured on your CGL (and sometimes Tech E&O/Cyber). Waiver of Subrogation prevents your insurer from coming after the customer.
Clause 3 — Notice + Certificate
Specifies how much notice the customer requires before any policy is cancelled or non-renewed (often 30 days), and the timing for delivering the certificate of insurance.
Where founders usually get tripped up
Cyber limit is too low — most common gap. Umbrella limit is too low — often forgotten entirely. Additional Insured language can't be issued by the in-force carrier. Notice-of-cancellation requirement exceeds carrier's standard.
Can I push back on a customer's insurance requirements?
Often, yes — especially on Additional Insured language carriers can't issue or on cancellation-notice windows that exceed market standard. We help draft the redline.
What does 'Additional Insured' actually do for the customer?
It extends your CGL (and sometimes other policies) to cover the customer for liability arising out of your work. It does not turn your policy into theirs.
Frequently asked questions
Can I push back on a customer's insurance requirements?
Often, yes — especially on Additional Insured language carriers can't issue or on cancellation-notice windows that exceed market standard. We help draft the redline.
What does 'Additional Insured' actually do for the customer?
It extends your CGL (and sometimes other policies) to cover the customer for liability arising out of your work. It does not turn your policy into theirs.
This material is general educational information, not legal, tax, or insurance advice. Coverage availability, policy terms, and regulatory requirements vary by state, carrier, and applicant.