As a kid, stacking dominos and watching them fall is fun. As a founder, watching a mistake topple your business is heartbreaking.
It’s tempting to ignore insurance as you get your company off the ground. There are two main reasons to consider insurance.
1) Guard against an unexpected disaster, attack, or interruption.
Repeat entrepreneurs often get coverage because they realize business continuity relies on mitigating risks.
2) Take responsibility proactively, since your board, bank, landlord, government agencies, and/or clients may require coverage.
𝘕𝘰𝘵𝘦: this post should not be used as legal advice. Seek expert guidance to meet your specific needs.
𝗧𝘆𝗽𝗲𝘀 𝗼𝗳 𝗜𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲
You may need these types of coverages:
· General Liability covers claims of injury (slip and fall accidents), libel, and slander against your business.
· Errors and Omissions (E&O) or Professional Liability covers against financial loss for claims against the products or services you offer.
· Cyber Liability helps protect against a data breach, software outage, cyber thefts, and phishing attempts.*
· Directors and Officers (D&O) covers top executives and directors against claims of wrongful acts, misconduct, theft, fraud, and more.
· Key Person is basically a life insurance policy for someone vital to the success of your company since their loss could be catastrophic.
· Employment Liability Protection Insurance (EPLI) covers lawsuits related to employees and running the company.
· Employee coverages also include Workers’ compensation, Unemployment insurance, and Health insurance.
𝗛𝗼𝘄 𝘁𝗼 𝗽𝗶𝗰𝗸 𝗮 𝗽𝗿𝗼𝘃𝗶𝗱𝗲𝗿
To determine if you can find a policy online or want to screen a few brokers, consider whether you need guidance now or over time.
Pricing depends on the types of coverages as well as limits, deductibles, and exclusions. Always review multiple providers.
Some of the application forms can be lengthy and confusing. Ensure you complete them properly and honestly.
𝘕𝘰𝘵𝘦: in reviewing claims, false or missing information on application forms may undermine your reimbursement.
𝗧𝗶𝗺𝗶𝗻𝗴
You may want certain coverages immediately while other policies can wait until you reach certain milestones or expansion.
Review your coverage annually (and at inflection points) to determine if policies need to be added or amended, such as:
· Facing a potential claim (failing to contact the provider immediately may result in denying settlement)
· Adding or moving locations (especially internationally)
· Launching new products or services, expanding facilities, or adding equipment, and
· Growing or expecting a new funding round
BOTTOM LINE - Get up to speed (or designate someone to own it) and possibly prevent a huge distraction from tumbling your dreams.
--------------------
* For useful Privacy and Data Security Legal Resources, visit https://mstreetlegal.com/privacydatasecurityresources from Andrew Mirsky