Insurance for Startups & Growth Stage

From seed to IPO, save 25% on top-rated insurance. Embroker’s Startup Insurance Package offers market-leading D&O, EPL, and tech E&O incl. cyber coverage. Get it in minutes, not weeks.

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What’s Included In Our Startup Insurance Coverage?

Our startup package provides all the market-leading coverage you need and is fully backed by Munich Re, one of the world’s leading reinsurers. Coverage can be bought in minutes and at stellar prices.

You can include directors & Officers (D&O), technology errors & omissions incl. cyber liability, as well as employment practices liability insurance (EPLI). You can also add fiduciary liability insurance to the package if necessary. 

Directors & Officers (D&O) Insurance

If you are looking to raise money, most institutional investors, such as venture capital firms, will stipulate as part of the term sheet that a proper D&O policy must be in place before the financing is complete.

When creating your Board of Directors, savvy board members will ask about the adequacy of your D&O insurance. D&O insurance protects your board of directors as well as the leaders of your organization if named in lawsuits alleging a breach of fiduciary duties. This policy will also extend coverage to the business entity itself. Settlements, as well as costly legal expenses, are both covered under a D&O policy.

Technology Errors & Omissions (E&O) incl. Cyber Insurance

Any startup that provides professional services and consulting to others based on professional expertise should consider E&O insurance. E&O protects against claims that allege damages arising from technology services you have provided and your customers and partners will typically require it.

As the technology sector continues to grow, businesses categorized as software as a service (SaaS) (read our guide on insurance for SaaS companies), web development, payment process, and anything else handling sensitive data will increasingly require a technology E&O policy.

Today, every company that has an online presence should have a cyber liability policy. If you store customer credit card information, Social Security numbers, or any other personal information online, cyber insurance adds a layer of protection in the event of a data breach or software outage. Cyber insurance policies can protect from the perils associated with being an online business, such as data breaches, cyber thefts, and phishing attempts. Cyber liability and (tech) E&O are often combined to create broader coverage for tech companies.

Employment Practices Liability (EPL) Insurance

As soon as your business starts hiring, you need to start thinking about EPLI insurance. EPLI insurance can protect your company from employment-related lawsuits such as sexual harassment, discrimination, wrongful termination, failure to promote, and more. EPLI is commonly combined with D&O insurance to create what is often known as a “management liability policy.

Who Is It For?

This insurance package is custom-made for venture-backed companies. We protect startup companies that have received seed or Stage A funding and growth-stage companies that have received Stage B or C funding, meaning a minimum of $50 million of funding.

Why Does Your Startup Need Insurance?

To put it as simply as possible, insurance is all about protecting your business.

Thoughtful diligence needs to go into the process of not only deciding on the type of business insurance your startup needs but also how and from which channels to procure the insurance.

Many startups perceive insurance as a luxury, something that they will look into once they feel that they are much further along in the company’s lifecycle. However, this is not the right approach to take. Any business, small or large, that is serious about sustainable growth should not postpone the process of purchasing the right coverage.

Certainly, risk is involved in the process of starting and growing a company. What many founders tend to look past is that building a risk management package is the best, most immediate way to transfer a large portion of that risk away from the business and themselves. Using insurance policies as a risk transfer can help the founders make the business more attractive to partners, potential investors, and other third parties whose collaboration will likely be needed in order to help put the business on a healthy and stable growth trajectory.

Insurance scales with your leadership, employees, and company’s ability to grow.

Building a risk management policy is akin to making an investment into your business, utilizing insurance to create longevity.

How having business insurance aids your company’s growth

  • It attracts investors: Having insurance in place prior to one’s fundraising showcases the founding members’ ability to think long term and the propensity to put company longevity first. Having the right insurance policy can often help investors during the diligence process and will strengthen a company’s chances of landing the right financing partners.
  • It attracts top talent: The best candidates don’t only care about money, they want great benefits as well. If you are not offering proper health insurance and other modern employee benefit coverage for your staff, you are going to miss out on the most talented candidates.
  • It builds customer relationships: Building trust between your business and its customers is critical, especially for startups who work in the B2B (business to business) space. Oftentimes, customers will mandate insurance requirements and request proof of insurance prior to signing a contract.

What Doesn’t It Cover?

While this package does give venture-funded startups excellent protection on some of the most important fronts, there are still several other policies that most startups should consider purchasing in addition to the critical policies offered in this package.

Some other insurance policies most startups need include:

Business Owner’s Policy (BOP)

Growth stage startups with less than 100 employees are usually able to purchase a business owner’s policy which includes general liability, commercial property, and business interruption insurance. If your startup has an office, these coverages will help protect you from possible claims arising from third-party property damage and bodily injuries and can offer financial support for fixing or replacing damaged property and equipment.

Workers Compensation Insurance

Workers comp is required coverage for most businesses in every U.S. state but Texas. Workers comp covers employee injuries, rehabilitation costs, lost wages, and legal costs in the case of an employee claim related to a workplace injury.

Key Person Insurance

If there is a key individual in your company that is vital to the success of your organization, a leader without whom the business would greatly suffer both financially and reputationally, key person insurance should be considered. A key person policy is basically a life insurance policy for a person in your startup who is virtually irreplaceable.

Commercial Crime Insurance

A commercial crime policy will reimburse your startup if money, securities, or any other tangible property is lost as the result of a criminal act. It covers crimes such as employee theft, robbery, wire transfer fraud, and more.

What Does Startup Insurance Cost?

No two startups are the same, which means that not every startup needs the exact same coverage. This also means that there is no one price that all growth startups pay when purchasing insurance. There are several key factors that insurers take into consideration when calculating premiums for startups, including the following:

Size

How many employees do you have? How big is your office? Do you have multiple offices? Do you own company vehicles? The greater the size of your startup, the more you’re going to be pay to insure it properly.

Industry

The industry that you are a part of can greatly influence your insurance costs, depending on how much risk is involved in the particular niche in which your startup operates.

Type of Business

The types of products and services your startup offers can also affect the price of insurance. For example, a startup that provides a cloud computing solution and must protect the data of thousands of other companies will pay much more for cyber liability insurance than a startup that sells hardware.

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“Fantastic service and competitive pricing! They helped us obtain the right coverage and pricing, with fantastic turnaround time. We worked with two other brokers before, and Embroker was definitely much better.”

Christian Anstett

Doppler Technologies, Inc.

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With a Net Promoter Score (NPS) of 70+ Embroker is the highest rated business insurance company in the market.

NPS Score 2020

17
Insurance Industry
71
Embroker

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