Words of wisdom from our business insurance experts.
What insurance does a technology startup need?
Congratulations you are launching a technology startup, but what’s the next step to get your business off the ground?
Whether your company is a consumer hardware startup, blockchain software startup, enterprise technology startup or other new software-as-a-service company, you need the right insurance policy to protect it against potential risks and mitigate risk exposure.
The tech startup industry is constantly evolving, and every industry needs different types of risk management. An e-commerce business needs a policy that specializes in risk management that keeps customer data away from cybercriminals. While the emerging cannabis payment processing startup needs expert advisors who are very familiar with the industry and understand what coverage is necessary. A software as a service (SaaS) startup needs to protect itself from client lawsuits insisting product negligence.
The right insurance policy is also a risk transfer that promotes the viability of the business to partners, potential investors, and other third-party partners looking to collaborate. Implementing a risk management program that optimizes your business allows for it to scale with a better workforce, leadership, and profitability.
At Fullsteam Insurance our expert insurance advisors work with you to get all the necessary details to tailor an insurance policy that fits your industry, business size, location, and the size of your workforce. Our priority is you and your business, so we work with the best insurance carriers to ensure you get the right coverage at the right price.
The insurance industry is filled with numerous types of insurance policies to safeguard your business no matter your industry. However, there are four key insurance policies you should implement from the get-go when establishing your tech startup.
General Liability Insurance: This policy protects startups from common lawsuits, such as bodily injury, property damage, and advertising injuries.
Business Property Insurance: This policy is also known as, commercial property insurance which covers your office space and the belongings within it from damage, fire, vandalism, pipe bursts, or natural disasters.
Advisor Tip: Combining general liability and business property insurance into a business owner’s policy can not only save you money, but most small, low-risk startups are eligible for this insurance policy.
Errors and Omissions: This liability insurance protects your company and workforce against claims made by clients that correlate to the professional service you provide. For example, unsatisfactory work or inadvertent mistakes.
Cyber Liability & Data Breach: As a tech startup this insurance policy is critical to ensure all risk is mitigated from data breaches or cyberattacks. This policy may include first-party and third-party coverage. Click here to learn more about cyber liability insurance.
As your startup grows your insurance policies need to grow with your business, this is done by adding on other policies or updating your current coverage. It’s key to always anticipate any potential risks or liabilities against your business, especially as you hire more employees, develop more products and services, and raise more funds for your startup. With the right insurance policies your startup can evade major losses in your workforce, time, and finances.
Here are a few simple questions you can ask yourself if you are wondering if it’s time to optimize your tech startup insurance policy?
- Are we hiring more employees?
- Are we launching new products or services?
- Have we raised more money?
- Do we have a growth in customers?
In order to sustain growth a startup should not hesitate to improve its insurance policy. The insurance experts at Fullsteam Insurance are well versed in the needs of a tech startup and understand what policies are vital to transfer risk from the business as it grows. There are four additional insurance policies a tech start up should implement as their business begins to scale.
Workers’ Compensation: This policy covers medical expenses associated with work injuries. This insurance policy is required by most states, except Texas.
Directors and Officers Insurance: This type of insurance policy protects your board of directors and leaders of your business if named in a lawsuit with claims of wrongful acts, management misconduct, theft, unfair competition, fraud, and more. A common misconception is that this policy is only necessary for large companies or publicly traded companies, when in fact it is not. As a tech startup looking to raise money most investors, like venture capital firms will stipulate a proper directors and officers insurance be in place for financing.
Key Person Insurance: This is generally a life insurance policy for a person in your business who is virtually irreplaceable. This person is typically an individual that is vital to the success and growth of the startup without whom it would have severe financial and reputational implications on the business.
Employment Practices Liability Insurance: This policy shields your startup from legal fees and judgements that arise from harassment, discrimination, and other rights violation claims.
As with any business cost is key, however with a tech startup, being mindful to overall spend is vital. It’s easy for businesses to decide to cut corners to save, however ensuring adequate coverage will save you and your startup in the long run. Deciphering an exact cost for an insurance policy depends on many variables like your industry, size of your workforce, customer volume, location, claims history, and more. That’s where your personal Fullsteam Insurance advisor comes in.
Our insurance experts work with you and your team every step of the way by reviewing quotes, negotiating the best terms, and they have access to the most reputable insurance carriers. The best part of Fullsteam Insurance is knowing you can rest easy and assured that as your company grows, we can grow with you. With Fullsteam Insurance you are always one-click away from speaking with an insurance advisor who can break through all the corporate jargon and tailor an insurance solution just for you.
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