Overview of the Education Technology industry

Education technology, or otherwise known as edtech, is the innovative union between technology — computer hardware, software, and processes — meant to promote and support education. From district leaders to parents, from universities to employers, edtech companies benefit many individuals.

Although edtech companies have been on the rise for several years, the recent pandemic has catapulted them to the front lines. Without the ability to hold regular classroom sessions, edtech companies have been the go-to resource for educators and learners around the globe.

Because of this distinct shift, the edtech industry has an exceptionally positive forecast. Even in such high demand, though, it doesn’t mean all risks have disappeared. Edtech companies still face many of the same challenges that other companies do. The slow rise to fame has helped them to tackle vulnerabilities in stride, making this market even more secure than expected.

Education Technology Graph

Some of the biggest risks EdTech companies face

Cybersecurity

Over $4 million is the average price tag of a data breach. Without some sort of financial safety net, this massive hit often shutters companies within a matter of months. When it comes to edtech companies, data privacy is a top concern. Unfortunately, cybercriminals are only becoming more sophisticated, executing multi-tiered attacks on the most unsuspecting victims. Edtech companies are a prime target, and a cyber attack can shut down an entire school district in one fell swoop.

Product Performance Issues

Not only is cybersecurity a significant concern, but also performance issues. Both young and old learners demand a lot from programs, apps, and websites. As a result, edtech companies must offer resilient products to handle all the demands of learners. If a product fails or doesn’t perform as expected, it could disrupt a student’s learning experience, a classroom session, or an entire university’s educational program. Keep in mind that one of the main reasons why edtech startups fail — despite the global value of edtech being $252 billion — is that many are unable to keep up with the fast-paced digital shifts in the tech industry.

Funding

Technology integration is necessary for edtech to thrive. However, barely over 20% of schools are highly integrated. Furthermore, schools don’t always have adequate funding to implement new edtech programs. Navigating this climate can be tricky, and settling for less than a product is worth isn’t an option for edtech companies. Naturally, securing funding in this situation requires financial savvy.

Social Response

According to a recent Gallup survey, “More teachers (64%), principals (73%) and administrators (66%) than students (42%) themselves say students would like to use digital learning tools more often to learn.” That said, some teachers and parents still aren’t on board with the idea of education technology. Sometimes it can be challenging to convince skeptics that edtech is genuinely beneficial to students and others.

Why is Insurance for EdTech Companies Important?

Now more than ever before, edtech has loads of responsibility on its shoulders. Although most edtech companies have been itching to implement their products full force, the climate hasn’t been entirely receptive. However, the COVID-19 pandemic made edtech learning invaluable. So, the tables are turning.

That said, now isn’t the time for edtech companies to misstep or falter in their business operations. Parents, teachers, students, etc. are all depending on these resources. Edtech companies can’t be distracted by legal disputes, failed product performance, or data breaches.

The world needs edtech companies, and edtech companies must deliver. For that reason, insurance plans designed for edtech companies exist. With the right policies, edtech companies can continue to benefit people worldwide in ways that we never imagined before.

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What Insurance do EdTech companies need?

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How much does Insurance for EdTech Companies cost?

The cost of insurance for EdTech companies will depend on several things, including the company’s size and the company’s stage of development. Other factors include:

  • Exposures: risks being insured.
  • Company practices: views on safety, compliance, and risk management. 
  • Program structure: the amount of deductible and willingness for a company to assume more risk
  • Number of users on the platform
  • Claims history: the type and amount of past claims against the company

Types of TechEd Companies that need insurance

Plenty of EdTech companies are thriving all across the country. Some are geared toward K-12, while others primarily focus on adult education. From online resources for teachers to homework apps incorporating gaming elements, types of EdTech companies run the gamut. However, each business faces unique exposures in its market. Here are examples of EdTech companies that need insurance:

  • Digital libraries
  • Online marketplaces
  • Data analytics
  • Curriculum technologies
  • E-learning for adults
  • Online colleges or universities
  • Group fundraising sites
  • Crowd-funding for public school classrooms
  • Learning management systems
  • Online tutoring
  • Textbook rentals
  • Language learning apps or platforms
  • Academic search engines
  • Communication platforms
  • Homework platforms

Learn more about insurance for TechEd companies

As the world changes, the way we educate must evolve, too. Here’s how edtech companies spearhead this shift and the risks they face.
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