The Insurance Roadmap for a Tech Startup
In my last post, I posed the question: “Why do you need Insurance”, discussing the importance of creating a Risk Management framework to determine where your vulnerabilities lie. Now I am going to follow that up by stating that yes, you do need insurance. Just as with a product lifecycle, there is a roadmap throughout the journey of a company that can be followed to understand how much and what kinds of Insurance you need. Let’s start at the beginning of the journey.
This can be an extremely exciting time, with little to no time to think about anything but driving your concept to reality. This is a difficult time to justify purchasing services like insurance as most of your budget is being utilized to get your product or service to market. However, if you ask those who have become successful at driving a successful startup, those who survive, think medium term, and those who thrive think long term. You need to protect your property (physical and intellectual), your brand and your people.
The very first types to consider are General Insurance and Errors & Omissions (E&O). General will cover you for any third party property or bodily damage, just as you would have this for your home insurance. E&O protects you from allegations of Breach of Contract, Failure to Perform or Negligent Errors or Omissions that result in financial loss to a third party – usually your clients. E&O policies are all different. Many provide excellent coverage for one thing, while excluding another entirely. This is the one that will protect you as you continue to perfect your product or service as it hits the market.
This is only the beginning, and has been discussed, there are many nuances and constant changes, so discussing your options with a professional is your best bet to ensure you are prepared for whatever the future may bring. Remember, we are in this together.
Industry Leader, Technology