By Adam Puharic, Puharic and Associates, Inc.
Since the business lockdowns of 2020 inadvertently ushered in a cultural revolution in workplace technology, entrepreneurs keep pushing the boundaries of startup technology and consulting businesses. Change is taking place so rapidly, and the opportunities to monetize your ideas and build a platform that allows you to live out your American Dream are seemingly endless.
Business insurance for technology firms remains a long over-looked and misunderstood piece of the entrepreneur’s business plan. You cannot possibly manage the risks for a modern technology or consulting company by using online insurance or captive agencies not focusing in this space.
The risks come from the malpractice (Professional Liability) front, the Cyber Liability front, and contractually from the General Liability front. There are a number of unique insurance products that combine these coverage lines within a single commercial insurance package. This allows for confidence in claims handling as the risk cannot be pushed off to an opposing carrier. What’s more, combining the exposures onto a common form is cost effective and convenient for the business owner to track and manage their expenses.
Once the firm has left the start-up phase, stand alone cyber liability, combined with technology professional liability allows for higher limits, complex coverage forms, multiple layers of protection and more thorough risk management.
The key for any entrepreneur is to access a risk manager at the beginning phases of their business development, and to plan and budget accordingly with the correct coverage. It has been an unfortunate but consistent experience of this agency to consult with a technology professional and make them aware of their under-insurance and the strategic risk they are taking. Once we level up their program, the dramatic increase in insurance costs is due to the fact that the business had been exposed and uninsured for years.
The better solution is to start with the right product, and to expand the insurance program as the revenue grows. It is a marsh harsher reality if you stay willfully blind to the risk your business is facing. Get the right insurance advice, and get it early.
