As startups grow, it’s imperative that they have a comprehensive insurance program to protect them from a myriad of risks. Startups often have a lack of initial capital, passionate but inexperienced management, and an intense focus on the product or service being offered. All of which makes not only insurance coverage, but a startup-specific insurance program, that much more important.
Directors and officers liability insurance, also known as D&O insurance, protects, appropriately, the directors and officers of a business from personal financial risk should a lawsuit be filed against their business. The coverage provided by D&O insurance is designed to cover lawsuits alleging financial injury as a result of mismanagement. In turn, D&O insurance is often acquired by startups as a condition for venture capital investment.
Employment practices liability insurance, also known as EPLI insurance, protects growing businesses in the case of lawsuits related to harassment or discrimination allegations. Unfortunately, simply being committed to honesty, integrity, and equality in one’s hiring practices, professional relationships, interactions, and behavior isn’t enough to preclude allegations of impropriety. In the passionate world of startups one can easily encounter misunderstandings related to employment, which can lead to costly and distracting lawsuits.
Fiduciary Liability Insurance
Fiduciary liability is a lesser-known area of business insurance, but one still worth taking into consideration. A fiduciary liability policy covers the business’s fiduciaries—employers, trustees, and professional administrators—in the event that alleged issues arise with any employee retirement plans. That primarily includes 401(k) plans, but can also include pension, retirement, and others that are regulated by ERISA (Employee Retirement Income Security Act of 1974).
It has been estimated that nearly 50% of small businesses have suffered a cyber attack, and 60% of those that do are forced to shut their doors within six months. Given this, consider the practicality of a cyber insurance policy for your startup. A cyber insurance policy will help your startup mitigate risks by covering the costs associated with the support and recovery from data breaches.
Where to Go for Dependable Startup Coverage
The best place to find the right startup insurance is an insurance brokerage that offers startup expertise and value. A brokerage that features plans specifically built around the individual needs of every startup is particularly important. The Embroker Startup Program is a strong example—not only can you gain market-leading coverage quickly (in 60 seconds or less), you can also acquire the insurance plans your startup can’t afford to go without.
Digital insurance brokerage Embroker has established themselves as an industry thought leader and innovator. They’ve built that reputation by leveraging their leading edge data-analysis and technological innovation, while combining it with a practical understanding of the industry and the liabilities faced by businesses in the modern marketplace. The result has been Embroker providing growing businesses and startups the best cyber insurance, D&O insurance, and EPLI insurance policies. The Embroker Startup Program is recognized as offering leading coverage to suit every startup’s specific needs.
Protect your startup or growing business at Embroker.com
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The small business, startup, and entrepreneur community is not only arguably the most vital, valuable, and exciting branch of the economy, it’s also an incredibly important driver of innovation, creativity, and technological advancement. Which is why the perpetuation of startup culture is so important. And that culture’s health and longevity relies on those startups being established, becoming successful, and staying in business.
Unfortunately, many of the features that are responsible for startups being so dynamic and groundbreaking can make them uniquely vulnerable to devastating lawsuits. A lack of experience, innocent mistakes, jittery investors and stockholders, and plain bad luck can spell disaster for a startup, even one that is otherwise successful.
Thankfully, there are steps the founders, officers, and management of a startup can take to mitigate or even alleviate their vulnerability. Steps that can mean the difference between the success or failure of a startup or small business.
Is D&O Insurance Really for Startups?
As the name implies, directors and officers (D&O) insurance is designed to protect the directors and officers of a company from any lawsuit alleging mismanagement of the company. There are, however, some misconceptions about D&O insurance that have a tendency to circulate in some business circles.
One of them is that D&O insurance isn’t relevant for startups and that it’s only for the brass of mega-corporations managing billions in assets. If you’re curious whether or not your startup could benefit from D&O insurance, ask yourself this question: Does your startup have any shareholders, customers, contracts with government agencies, or business competitors? If the answer is “yes,” D&O insurance can indeed protect your business and securing coverage may be a wise decision. Not to mention, those huge corporations often have the assets to absorb the cost of a lawsuit, win or lose, that the average startup just doesn’t.
Lawsuits Are Only a Risk for and From Fraudsters, Right?
Another misconception, generally held by the founders of startups, is that if they operate honestly, ethically, and respectfully, and only hire or financially associate with people who do the same, and stay compliant, they’re not at risk for a lawsuit. Therefore, according to their logic, lawsuit-protection policies like D&O insurance or EPLI insurance simply aren’t worth it.
Sadly, that’s not the case. Discerning, conscientious, and even scrupulously honest business owners can (and will) make mistakes. Experience has to be earned and sometimes it comes through hard lessons. Even the shrewdest, most seasoned corporate execs with decades of hiring experience under their belts will tell you that being able to distinguish the legitimately good, trustworthy candidates from those who just talk a good game, can range from being really tough to nearly impossible.
Business with Family and Friends
Startups are usually a very personal labor of love for their founders, and very often, that labor has been shared among close friends or family members. While business relationships with the people you trust and care for most in the world can prove to be incredibly fulfilling and successful endeavors, there’s another side to them.
Take people with close emotional bonds, add money and the success of a business those people are passionate about and things can get extremely heated. Strictly financial partners can brush off the mistakes, minor misadventures, and misunderstandings that so often accompany running a business. While the same minutiae can explode into intensely personal antagonism between friends and family. All in all, the comfort of having an insurance policy you may never need is always preferable to the alternative.
Embroker is a thought leader among digital commercial insurance brokerages. They established themselves as industry innovators by combining the most trustworthy, cutting-edge data and technology with real, practical industry specialization. It’s an approach that’s consistently resulted in Embroker offering growing businesses and startups high-quality coverage be it D&O insurance, EPLI insurance, cyber insurance, or all other lines of P&C insurance. Their Startup Program offers market leading coverage in under a minute and is custom built for startups. Since their 2015 founding, Embroker has served more 1,800 industry clients and is licensed in all 50 states.
Find the insurance your startup needs, at Embroker.com
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While undoubtedly aware that hacking, identity and information theft, and data breaches are a massively destructive and costly global threat, the average entrepreneur may not know how great the risk is to them. The cyberattacks that get the press are the ones suffered by the huge corporations, a list of which is too long to include here, but that’s not to say that small- to mid-sized businesses aren’t at risk. In fact, 60% of small businesses that get hacked don’t bounce back from a cyberattack and fold within six months.
So, with the obligatory disturbing statistic shared here, what can you do to protect yourself and your business from the consequences of cyberattacks should that become an unfortunate necessity? The concern might be complex, but the answer is simple: You can get cyber insurance.
What is Cyber Insurance and What Does it Cover?
Cyber insurance was born as a feature of broader errors and omissions (E&O) insurance policies. The increasing prevalence, damage, cost, and risk of cyberattacks led to its emergence as a specific area of coverage.
The origin of cyber insurance has led to a misnomer that an E&O policy is therefore sufficient protection against a cyberattack; or that a general liability policy would cover the costs. That’s not the case, as too many entrepreneurs have learned the hard way. There really is no substitute for the coverage provided by a strong cyber insurance policy.
There are a few areas of coverage that are common to most cyber insurance policies, such as:
What Should I Look for in a Cyber Insurance Policy?
While the basics of cyber insurance policies can be similar, that doesn’t mean they are interchangeable. There’s no one-size-fits-all solution. Finding a provider willing to tailor a cyber policy to your specific needs is a must. Look for relevant brokerages that focus on insuring growing businesses and startups. In particular, find brokerages specializing in cyber insurance and in related fields of liability and exposure mitigation like E&O, D&O insurance, fiduciary liability insurance, and EPLI insurance.
When you’ve found some likely candidates, review the specifics of their cyber insurance offerings. An effective cyber policy is one that addresses both the direct cost and the fallout of a cyberattack, including consequences and costs you may have not even considered. Those consequences can be direct hits to your company’s bottom line, like peripheral data loss, business interruption leading to loss of profits along with extra expenses, the loss of funds being transferred, and new security measures necessary to prevent future attacks.
There may be direct and indirect customer, branding, and optics concerns like liability to banks required to reissue credit cards en masse, public relations expenses related to data breaches, and subsidizing credit monitoring to those exposed.
And then there are the legal, regulatory, and third-party liabilities too numerous to list here. Fortunately, a strong cyber insurance policy from a trusted provider can cover or defray those costs while leveraging risk mitigation resources to avoid them in the first place.
Cyberattacks are a destructive, frustrating, and pernicious reality of the computer age. But with the right coverage, they don’t have to be fatal to your startup or growing business.
Embroker is a leading digital commercial insurance brokerage that specializes in covering business liability with coverage custom-made for each client. Their combination of data and technology with real industry specialization has established their reputation as a top-tier brokerage. Founded in San Francisco in 2015, Embroker continues to serve over 1,800 customers and is licensed in all 50 states. Their user-friendly platform and live on-hand experts ensure a smooth, easy, and intuitive user experience. From crime to D&O insurance, whatever specific insurance your growing business or startup needs, Embroker has got you covered.
Protect and preserve your business at Embroker.com
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Running a business can come with its fair share of gains, such as profits and sharing your service or product with consumers, but it also comes with inherent risks, including but not limited to lawsuits and discrimination claims. To protect both yourself and your business, it’s imperative that you work with a trusted insurance brokerage to find the insurance your company needs to mitigate risks and the costs associated with recovery—be it from getting hacked or being sued.
In order to protect yourself from a cyber-related security breach, it’s beyond important to have strong cyber insurance coverage. Also referred to as network security and privacy liability insurance or cyber liability insurance, this coverage helps businesses mitigate risk exposure and pay for the costs that can be associated with recovery from a cyberattack such as a customer data breach.
It’s important to note that big businesses aren’t the only ones at risk of cyberattacks. You need to protect your company from this threat regardless of its size, as small businesses, in particular, have a much harder time bouncing back from being hacked. In reality, 60% of small companies don’t bounce back from a cyberattack and end up closing six months after.
Employment Practices Liability Insurance
Also referred to as EPLI insurance, this critical coverage helps businesses protect themselves from lawsuits that could be brought up by current or former employees—even candidates. Employers need to always act appropriately around employees, but should be particularly cautious regarding the age, national origin, religion, gender, and even pregnancy of current, former, or potential employees. Relevant non-discrimination cases include wrongful termination or failure to promote.
It’s worth noting that misbehaving managers can significantly cost a business if they take inappropriate actions or make unprofessional remarks. Additionally, even if an employee is no longer with your company and has signed a waiver or agreed to receive a severance that does not mean they have waived their right to file a discrimination case if they feel justified.
Directors and Officers Insurance
Also referred to as D&O insurance, this coverage protects the—you guessed it—directors and officers of a company if a lawsuit is filed claiming financial injury due to mismanagement. This coverage helps your company’s leadership take the actions needed to keep the business successful by lessening fears of personal financial loss.
To be clear, D&O insurance typically does not cover any lawsuits that might occur between the directors and officers within a business.
Embroker is a leading digital commercial insurance brokerage that combines data and technology with real industry specialization to help growing businesses find the coverage they need. Founded in 2015, Embroker serves over 1,800 customers and is licensed in all 50 states. The San Francisco-headquartered business helps their clients save time via Embroker’s user-friendly platform to digitally carry out needed tasks, while real live experts are on hand to help. Whether your business needs crime or cyber insurance, Embroker has the tools to support your claims and protect your time.
Get the coverage your business needs today at Embroker.com
Original Source: https://goo.gl/XbR4vU