Directors & Officers Liability Coverage – commonly called D&O Insurance, you may be forced to purchase this by investors or when you form a board and have independent directors sitting on your board. VC Partners and other investors may insist that your firm purchase D&O insurance because it is there to protect decision makers from suits that may arise from “wrongful acts” in their capacity as directors and corporate officers. A wrongful act may be a statement which is misleading, an error, act or omission, neglect or breach of duty. Since Directors have personal liability for the decisions they make at a board level it’s critically important to protect them with this form of coverage. In addition to D&O coverage, it’s recommended to include as a separate policy or separate limit of coverage within a D&O Management Liability policy protection from Employment Practice Claims. Often called EPL Insurance, this protects business leaders from claims for wrongful employment acts such as wrongful termination, harassment, failure to promote and more.
Claims arise from a variety of sources under a D&O policy, including: competitors, regulators, creditors, banks, employees, investors, and shareholders. There’s a misperception that only public companies need or purchase D&O insurance, but the simple fact is that small private companies (especially those with investors and independent directors) need D&O coverage because the perils that are covered under it, are excluded under other policy forms. The good news, for smaller tech firms the minimum premium for D&O Insurance may be as low as $2,500 a year!
Umbrella / Excess Liability – as your company grows it makes sense to purchase higher limits of liability protection over your general liability, auto liability, and technology E&O coverage forms. Typically companies start off with $1,000,000 of excess coverage, but in some circumstances or projects there may be a demand for much higher limits from your customers.
Risk Management – part of the service we provide to our clients is access to our resource rich risk management library of over 4,000 documents. Contained in that library as well as through other sources we have available to clients are resources to help you control risk – everything from ergonomic resources, data security resources, to keeping employees healthy and safe. For more information on Risk Management, please contact us.
Key Person Insurance – while we don’t sell life insurance, we can recommend you to an expert who does. Key Person insurance is a valuable tool when your company is growing to do two things: a. retain key employees by creating a valuable benefit for them, and b. help fund an employee search and talent replacement should that key person die prematurely. The death of a key person during early stage development can be devastating, so protecting that key asset with life insurance can be an important hedge.
Need help? Have questions? Contact us, we can help guide you through the maze of insurance which at times may seem confusing. We’ve helped a lot of startup companies in the past and enjoy working with them, so no question is too stupid or silly to ask.