Types of Insurance Every Tech Startup Needs

Types of Insurance Every Tech Startup NeedsWhen launching your tech startup, make sure that you have covered all the basics. This means more than just stocking the break room with awesome snacks and game tables. It also means ensuring that your company doesn’t suddenly get hit with crippling costs. Ensuring that you have what you need to weather future storms will be vital to the survival of your company, so you can keep doing what you love to do.

Cyber Insurance

Cyber security is more important today than ever before. It’s not just viruses and malware that you have to worry about when planning your cyber strategy. It’s also important to consider what could happen to company and customer data that is outside of your control, such as on third party storage services, remote network management or CRM services. Entrepreneur.com stated that US research has shown that in 2017, the global average cost of a single data breach event was $3.6M.

View our other article on why you should protect your business from the high costs of hackers, The Importance of Cyber Insurance. Protecting yourself with proper tech equipment and with the right insurance policy is a helpful way to protect your new startup.

Liability Insurance

Lawsuits are increasingly unavoidable for any company, no matter how large or small they are. According to Fulbright & Jaworski LLP, nearly 90% of all US companies are dealing with some form of litigation. With the protection of a liability insurance policy, damages and legal fees will be covered up to the limit on your policy. Your tech startup could be responsible for many out-of-pocket costs without liability insurance, including legal, medical, compensatory and punitive damages.

Liability insurance doesn’t cover all cases of professional negligence. For those situations where you are found to be at fault for errors, negligent acts, or were unable to perform a professional service, you’ll also need special liability insurance.

Workers’ Compensation

Some forms of insurance are required by law. Workers’ compensation is required in almost all states and has some great benefits that protect your employees in the event of an injury on the job. Accidents are more commonplace than you might think. Workers’ compensation has the added benefit of paying the employee’s salary during any missed days. Having workers’ compensation insurance means you are protecting your company and employees by getting them the help they need if an accident were to happen.

Property Insurance

Fires, natural disasters or accidents can be crippling for a new company. Every year, 70,000 workplaces in the United States experience a serious fire. The NFPA states that in 2015, the costs from damages to stores and offices hit over $400 million. Property insurance will cover damage for more than just the offices or buildings you use for your company. Damage to equipment and supplies necessary for business operations are covered as well. Need to remove debris? That’s covered too.

Business Owner’s Insurance

A business owners policy (BOP) bundles general liability insurance and property insurance. A BOP is typically less expensive than both policies purchased separately. Loss of income caused by interruptions in the business is covered as well. Not all businesses qualify for BOPs but talking to an insurance agent to see if you qualify is a great way of potentially saving money.

Every state handles some forms of business insurance differently, so be sure to get the right information that is tailored to your company. Talk to an agent about the specifics of what your state requires and what the limits on coverage and treatment for employees are. If you have any questions about the right policies for your tech startup in Massachusetts, contact our agents at TJ Woods Insurance.