January 28, 2016
Tech startups aren't going anywhere anytime soon. In fact, there are over 1.35 million high tech startups with more cropping up each year. Unfortunately, tech startups can be an easy target for lawsuits. Decades ago, a substantial amount of money was needed to start a technology company, but in today's world, many people are starting their own high tech startups with a shoestring budget. While some of those startups may be sitting ducks for future lawsuits and personal injury claims, smart business owners who invest in a good insurance policy should be protected for the long run.
Ensuring Your Startup Is Rated Properly
You would probably agree that all tech startups are not created equally. Insurance companies know this, too. So as you begin your pursuit to obtain the necessary coverage for your business, the insurance agents who quote your coverage will have to do some research. Unlike most brick and mortar businesses, your startup may not fall into a predetermined category with risks that the insurance company has assessed and fully understands.
Because of this, it is extremely important that any and all public information about your startup is as accurate as possible. Although you may want to have all of the services you can potentially provide in the future listed on your website, this isn't a great idea. In order to develop a realistic view of what your company does and what types of risks you could be subjected to, the insurance underwriters will use information found on your website. Since services that pose greater risk could drastically impact your insurance, you might want to omit these from the list of services offered if you aren't already performing them. You don't want your insurance to be rated on risk factors that are actually non-existent.
Getting Adequate Coverage
Your company may not need as much general liability coverage as a truly risk-prone business, such as a building contractor. However, in today's world, it doesn't seem to take much to warrant a lawsuit. Luckily, a commercial general liability policy protects against a wide range of liability claims including property damage, bodily injury, and personal injury liability, such as copyright infringement, misleading or false advertising, libel, and slander.
With this coverage, your policy will protect your company's assets and pay for legal costs incurred if your startup is sued for a covered error or offense. The types of personal injury liability claims that will be covered vary from company to company, so it's a good idea to shop around, compare insurance quotes, and make sure you're getting a sufficient amount of coverage. Don't be embarrassed to ask a lot of questions. It's always better to have more information than not enough. By asking the right questions, you may discover additional coverage your business requires.
Choosing the Right Policy
What kind of insurance policy does a tech startup need? Well, it all depends on your location and what type of services your business provides. If you work out of your home, you may be able to get by with a standard general liability policy. However, startups that own or lease the building they operate out of will need more coverage so that the building and contents are insured, as well. Often, you can purchase general liability and property insurance in a bundle, which is known as a Business Owner's Policy. Talk to your insurance agent to find out what type of policy is appropriate for you.
When you go to sign on the dotted line, you may initially get sticker shock at the price of your policy. Don't let the premium be a deterrent that keeps you from getting liability coverage. The protection this policy will give your company is tremendous. Furthermore, the total amount of premium you may pay over the next decade could be just a drop in the bucket compared to what you would have to pay out of pocket if your startup was sued and you didn't have liability coverage.
For the owners of many high tech startups, insurance is the last thing on their minds. However, if you want to do everything in your ability to stay in business, obtaining commercial general liability is a no-brainer. All it could take is one small mistake and one big lawsuit to put you out of business. You may not be required to purchase liability insurance for your company, but if you want to protect yourself, your employees and everything you've worked so hard to build, this insurance is an absolute necessity.
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