Running a tech company comes riddled with many complex challenges and little nuanced details that really make a big impact as the company grows. One of these details to look out for is getting the right insurance in order to achieve a solid future for your company. The beauty of tech companies is that they are infinitely scalable in terms of services that they can offer, however, this raises the odds of things that could go wrong. That is why it is essential to get the appropriate insurance. However, there is more to getting insurance than meets the eye. Here are a few essential things you should know before getting insurance for your tech startup.
Avoid junk insurance
There are many insurance options to consider, however, it is not so easy to determine which one is right for you. In addition, the fact that most insurance companies use predatory tactics while offering their services is not making the situation any easier. You are very likely to get yourself some junk insurance which you didn’t request when trying to insure your business. So, you might be wondering how to get junk insurance back, luckily it can be easily refunded if you heed the advice from verified professionals who deal with clients’ junk insurance cases on a daily basis.
Adjust your coverage for new investments
Investments are fundamentally attractive to business founders and they keep the business thriving by opening many new options, however this aid yields risks as well. It is crucial to understand that when closing a funding round, investors usually require the founders to get coverage in order to secure everyone’s assets. If investments are announced publicly, this can draw too much attention, which can bring about series of intrigues. So, you might need to adjust your coverage plans.
Consider errors and omissions insurance
If your company is developing a digital product, you are not likely going to benefit from getting a product liability insurance, since you are most likely selling a software, an application or a similar IT product. That is why it is well worth considering an errors and omissions insurance (E&O) policy in order to cover for crucial software errors.
Start with the basics
With all the convoluting options, you can’t get your head wrapped around just where to begin. Every start is intimidating. That is why as a startup the ideal way to kick off your journey is to get the basic business property and general liability insurance. Now you can run your business without worrying if one of the laptops goes missing, or if there is a mild workplace accident.
Consider cyber liability insurance
Many tech startups juggle large amounts of data and private user information, although this may not be a tangible issue, it nonetheless poses a huge financial risk, because it can result in huge lawsuits. Data breaches and cyber attacks are a real thing and they are pretty much a given. However, most people and even CEOs have a mindset of “well it won’t happen to me”, until it does. Luckily there are two types of cyber liability insurance policies that you may want to consider in order to minimize the risk factors. Firstly, there is the first-party cyber liability insurance which covers the costs caused by cyberattacks on your company’s servers and networks. On the other hand, third-party cyber liability insurance covers the lawsuit expenses that may arise if the users’ data is breached and your clients are put at great risk.
There is nothing more exciting than running a tech startup, however since everything is rather unpredictable it is well worth considering the risks and benefits while searching for an insurance policy. Start with the basics. There is a plethora of confusing options on the market, and your tech business is not going to require most traditional policies, which leaves you all the more vulnerable to redundant junk insurance. You might need to upgrade or readjust your insurance policy later in order to ensure that investors can trust you. You should also consider the cyber liability and errors and omissions insurance policies, which keep all the parties’ interests secure.