By Linda Rosencrance, Insureon Contributor
As an owner of a technical startup, you sometimes have to take risks if you want to be successful. How an entrepreneur manages risks can determine if a company succeeds or fails. Here are several typical risks that arise for start-ups in the technology industry and tips for mitigating them:
Running out of money
Running out of money is one of the biggest risks that are starting before. There are several steps you can take to reduce your financial risks, such as keeping an eye on your finances and reducing costs. If you want to be in business, keep track of your accounts receivable and ensure that your customers and customers pay their invoices on time.
It is also important to have good records so that you get a proper representation of the company's finances. In addition to keeping track of what is owed to your company, documentation is proof that you have paid your contractors and your taxes.
You should also consider buying technology insurance to protect your business if something jeopardizes your financial health or interferes with your business.
Cybercriminals are target companies of all sizes in every industry trying to steal financial, personal, and proprietary tasks that they can sell for profit or hold. In addition to the expensive recovery costs, a data breach can lead to irreparable damage to your startup reputation.
To protect your technology start, implement accurate password protocols, secure your network and keep the security program up to date. Make sure all your employees are trained with best practices for cyber security.
Finally, explore liability insurance options for the Internet, protecting your business from financial losses and liability if data damage occurs.
If you run a hardware or software technology startup, you need to worry about what happens if your products fail and damage your customers or their property. You can suffer a liability.
If a battery pack is overheated while charging and burning a customer, you may be liable for damage. If several customers are injured, you can face a trial. Likewise, biotech starts can be held responsible for products during the clinical trial phase and after products hit the market.
To manage this type of risk, consider product liability insurance, which is usually included as a rider with liability insurance
Damage to equipment and facilities
Like all companies, technical start-up is facing risks related to weather, theft, fire, vandalism or other damage. Replacing expensive equipment and furnishings in your office can track your company's financial plans.
You can protect your equipment with regular monitoring and maintenance, and by removing risks in the area around your equipment. Commercial property insurance can also help you mitigate losses with financial support for repair and replacement costs.
Protection of Intellectual Property Rights
Intellectual Property Rights is the core of many technical startups. It is important that the owners of IT startup, including fintech (financial technology) and software development, protect their intellectual property rights with patents and copyright. Digital Rights Management software can also protect your business with specialized controls to prevent others from printing, copying and downloading the content.
Create a written subcontract agreement to ensure that none of your subcontractors violate your intellectual property rights. Fidelity bond insurance can also provide coverage if one of your employees steals your intellectual property.
Protect Your Start With Insurance
Here are some other types of insurance you should consider for your tech start and the risks they cover:
- Technical Errors and Negligence Insurance. This policy provides protection when a client sends a lawsuit against you for a missed deadline, an error in your code, or other oversight that harmed the customer's business.
- Trustees and officials (D&O) insurance. D&O insurance is crucial if your technology start depends on its leaders to decide how to spend or invest the company's money and determine the direction of the business. D&O insurance covers your board members and officials against litigation arising from administrative decisions they have made on behalf of your company.
- Liability insurance for liability insurance. This policy covers claims against existing, former or potential employees, including claims relating to discrimination or harassment at the workplace.
Insuron has helped more than 50,000 IT business owners protect their businesses. Start a free online application with Insureon to compare start-up quotes from the best US carriers.