In startup insurance due diligence, investors may review a startup's policies, claims history and known circumstances that could lead to a claim. Investors may ask about directors and officers (D&O), cyber and technology professional indemnity (Tech PI) insurance.
Tech PI insurance is designed to cover claims that your advice, service or work caused a client financial loss. It may include legal defence costs, compensation and any settlement you are legally liable to pay, subject to the policy terms.
Directors and officers (D&O) insurance is designed to help protect directors and officers personally against claims about decisions they made in that role.
Cyber insurance is designed to cover costs after a data breach or cyber attack. Third party cover may respond to claims from customers or regulators.
Each cover is subject to the policy terms, conditions and exclusions. Cover depends on the policy and insurer you choose. Check the policy wording and its terms and conditions for what is and isn't included.
Key takeaways
- Incoming directors may ask about D&O insurance before joining a board.
- A data room may hold policy wordings, earlier schedules and an incident register.
- Tech PI gaps and incidents not notified to an insurer may draw investor questions.
What insurance do investors review in a startup data room?
In insurance due diligence for startups, a data room may hold current and earlier policy documents and records of claims and notifications. Startup insurance due diligence is not a standard checklist, so requests may vary by investor.
| What investors may ask |
Documents a startup may prepare |
| Is each policy current? |
Certificate of currency
(proof a policy is active) and policy schedule
|
| What does each policy cover? |
Policy wording and endorsements (written policy changes) |
| Has the cover stayed continuous? |
Earlier schedules and past notifications |
| Are security controls documented? |
Security questionnaire answers
(cyber insurance requirements guide)
|
| Are there known circumstances? |
Register of incidents, complaints and demands |
Swipe left or right to see the full table.
Why may directors and officers insurance come up in a funding round?
Directors and officers insurance may come up when a funding round adds investor-appointed directors, who each take on legal duties.
As at the time of writing (October 2026), the Australian Securities and Investments Commission lists directors' duties under the Corporations Act 2001.
An incoming director may ask whether the D&O policy extends to new directors and how the policy fits the company's deeds of indemnity.
What do investors ask about cyber and tech professional indemnity?
Investors may ask whether cyber and Tech PI policies are in place and whether the Tech PI schedule describes the services delivered.
If you had a data breach, investors may ask whether it was notifiable under the Office of the Australian Information Commissioner's Notifiable Data Breaches scheme. See SOC 2 reports and cyber insurance for the difference between controls evidence and insurance.
Why do claims made continuity and known circumstances matter?
In insurance due diligence for startups, investors may check that Tech PI has stayed in place without a gap and that past incidents were notified.
Claims made continuity
Tech PI is generally written on a claims-made basis. The policy wording sets out when a claim must be made and notified for the policy to respond.
Claims-made cover can require continuity because a claim may arise after the work was completed.
The retroactive date sets the earliest date of past services a Tech PI policy may respond to.
Known circumstances
You can start a claim through the make a claim page. Admitting liability, incurring costs or agreeing to a settlement before you notify your insurer may affect your claim. Starting a claim does not confirm that your claim is covered; your insurer assesses it under the policy terms, conditions, exclusions and limits.
What do these covers commonly exclude?
D&O, Tech PI and cyber insurance commonly exclude matters known before cover started.
Directors and officers insurance
Exclusions commonly include, but are not limited to:
- claims linked to known facts, or prior and pending proceedings, that started or were known before cover began
Tech professional indemnity
Exclusions commonly include, but are not limited to:
- service credits, liquidated damages and other liability you take on under a contract that would not otherwise exist under the law (contractual liability exclusion)
- claims and circumstances you knew about before the policy started
Cyber insurance
Exclusions commonly include, but are not limited to:
- incidents a senior executive knew about, or could reasonably foresee, before cover started
Important: These lists are not exhaustive. Exclusions vary between insurers. Always refer to the policy wording and its terms and conditions for the exclusions that apply to you, and if you have questions you should speak to your insurance broker or the upcover team.
How upcover can help
upcover arranges directors and officers, Tech PI and cyber insurance for startups. upcover works with 80+ insurance partners and can arrange quotes from a range of insurers.
- 70,000+ businesses covered across Australia
- 4.9/5 customer rating
- 80+ insurance partners
Request a startup insurance quote.
Frequently asked questions
Is directors and officers insurance required before a Series A?
Investors or an incoming board member may ask about directors and officers insurance before a Series A. See D&O insurance for founders and D&O limits.
Is a certificate of currency enough for investor due diligence?
A certificate of currency may not be enough: the Department of Defence guidance note says it "will not provide details of the full terms, conditions and exclusions of cover".
Does a funding round change a startup's existing insurance?
If a funding round changes the business, check whether the policy schedule still describes it accurately. See startup insurance for cover by type and stage.
What if a startup has no insurance during due diligence?
A diligence team may note a missing policy and ask why. See startup insurance cost for factors that may affect price.
Do enterprise customers review insurance the same way as investors?
Enterprise customers may ask a vendor for specific policies and limits before signing (SaaS enterprise insurance requirements), while investors may also review directors' cover.
Written by upcover's editorial team.
This article provides general information only and does not take into account your objectives, financial situation or needs. It is not legal or investment advice: get legal advice about directors' duties and any insurance terms in your funding documents. Laws and guidance quoted are as of October 2026 and may change. Insurance availability and cover are subject to underwriting and the terms, conditions, limits and exclusions of the relevant policy. Read the policy wording and its terms and conditions before deciding. upcover arranges insurance products with selected insurers and underwriters and does not compare all general insurers or insurance products available in the market.
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