5 Common Mistakes Large Tech Companies Make When Evaluating Their Insurance Needs

Large companies often face unique risks that require comprehensive insurance coverage. However, even the most innovative firms can make critical errors when assessing their insurance needs.

Risks ranging from cybersecurity threats, intellectual property disputes, business interruptions, and evolving regulatory landscapes that pose grave threats to the sustainability of even the largest business.

Fabio Faschi , Head of Sales at StartSure and a seasoned expert in insurance and risk management, shares insights on the five most common mistakes tech companies make in this area.

1. Underestimating Cybersecurity Risks

"One of the biggest mistakes tech companies make is underestimating the extent of their cybersecurity risks," says Faschi. "In today's digital landscape, data breaches and cyberattacks are not just possibilities but probabilities. Companies need to invest in robust cybersecurity insurance to protect against potential losses and liabilities."

2. Neglecting to Update Coverage Regularly

"Tech companies grow and evolve rapidly, and so do their risks," Faschi explains. "Failing to regularly update insurance policies to reflect new risks, acquisitions, or changes in operations can leave companies exposed. Regular reviews and adjustments are crucial to ensure adequate coverage."

3. Overlooking Business Interruption Insurance

"Many tech companies focus on liability and property insurance but overlook business interruption insurance," Faschi notes. "This coverage is essential for protecting against income loss during unexpected disruptions, such as natural disasters or significant cyber events. It's about maintaining financial stability during tough times."

4. Inadequate Coverage for Intellectual Property

"Tech firms often possess valuable intellectual property (IP), but they may not have sufficient coverage to protect it," says Faschi. "IP insurance can safeguard against infringement claims and protect the company's innovations, which are often its most valuable assets."

5. Failing to Engage with Specialized Insurance Brokers

"Insurance needs in the tech industry are complex and specialized," Faschi emphasizes. "Engaging with brokers who understand the specific risks and regulatory landscape of the tech sector can make a significant difference. These brokers can tailor policies that provide comprehensive protection tailored to the company's unique needs."

Implementing Proper Risk Management

To effectively implement this advice, large tech companies should work with a brokerage that can offer to conduct comprehensive cybersecurity assessments regularly and ensure they have robust cybersecurity insurance in place. They should schedule periodic reviews of all insurance policies to ensure they reflect current risks and business changes. Including business interruption insurance in their coverage is essential to protect against unforeseen disruptions.

Additionally, companies should secure adequate intellectual property insurance to protect their valuable resources. Finally, engaging with specialized insurance brokers such as StartSure who understand the tech industry's specific needs and regulatory requirements can help tailor their policies for comprehensive protection.

Fabio Faschi is the Head of Sales at StartSure, a national insurance agent, and a risk advisor certified as a Commercial Lines Coverage Specialist, Cybersecurity, and Risk Management expert. With over a decade of experience in the industry, he brings invaluable insights and expertise to help tech companies navigate the intricate world of insurance and risk management.

StartSure is an insurance brokerage that combines a broad-array of insurance expertise with streamlined solutions and specialty best-in-class brokers to provide tailored coverages which grow alongside today’s modern businesses. Learn more at StartSure.co