Update: We’ve released a new whitepaper examining the Sharing Economy industry. We dive into the insurance landscape, legal climate and how to approach risk management for companies in this sector. You can download the report here!
In a world where consumers’ lifestyles revolve around instant gratification, the on-demand business model is quickly becoming standard. Traditional businesses are grabbling to keep up. As you try to skyrocket your on-demand company, new risks emerge, as well. But the last thing you need is a professional slowdown. In this post, we’ll hone in on specific insurance policies that help to cover new risks on-demand companies face and keep you on the pathway to profitability.
1. Errors & Omissions
It’s crucial to identify your unique exposures in a particular industry to succeed in a niche market. Remember that not all risk is created equal, so not all coverage is, either. That said, errors and omissions (E&O) insurance, also known as professional liability insurance, covers third-party financial loss related to your product or services.
For example, should your on-demand product or service fail to deliver as expected, you may wind up with a profoundly unhappy customer (and a lawsuit). Your E&O insurance helps to cover any defense costs as well as settlements. Mostly, it’s malpractice insurance for niche market professionals.
To skyrocket your on-demand company, understand that holdups in court mainly hold your business back. By covering your niche risks, you help to increase your profitability through momentum.
2. General Liability
For most business owners, general liability (GL) insurance is a no-brainer. Still, we include it in this lineup because adequate GL coverage is that crucial to the success of your on-demand business.
Firstly, do you have a blog or landing page where you funnel customers? How about an actual office space or work zone? These are the common areas where GL insurance works to safeguard.
Briefly, GL insurance protects your company from a broad range of professional risks, mainly those that go hand in hand with running a business. One famous example is the “slip and fall” situation. Your GL policy would cover litigation and medical costs.
Keep in mind that this particular policy will need to be reviewed regularly as your on-demand business expands and grows. The same plan that covered you during professional infancy won’t be enough now.
3. Cyber Liability
The modern-day customer has tasted the ease of on-demand services and can’t get enough. Along with services and products, however, customers demand a few conveniences from these companies. Namely, customers want companies to communicate as they do, and they want self-service options, too.
What this means for your growing on-demand company is that you must protect those online platforms from cyber threats. Enter cyber liability insurance stage left.
If you have a sign-in feature, communicate via email, or store any customer data, you’re on a cybercriminal’s radar, plain and simple. Although these specific online functions are current business standards, they still put you at significant risk. With a typical data breach costing close to $4M, one could ground your on-demand company permanently.
Cyber liability insurance works to protect your on-demand company against third-party lawsuits as well as fines and penalties. Having a robust protection plan in your corner can prevent any legal or financial delays, helping to skyrocket your on-demand company upward.
4. Employment Practices Liability
Working from your basement during the startup stage is a far cry from having a multitude of employees on staff. Plenty of new risks enter the picture when people do. Plus, the definition of “employee” is being redefined, as well, impacting the gig-economy significantly.
Employment practices liability (EPL) insurance steps in to help manage specific exposures. In short, EPL insurance is management liability insurance, revolving around the risks associated with hiring employees or independent contractors.
No matter how well you manage the people in your company, disputes happen, and risks always exist. What’s worse is that filing a case of action against an employer is incredibly easy nowadays. Therefore, protecting your company is vital.
5. Directors and Officers
Along with EPL insurance, another people-related policy comes into play to help skyrocket your on-demand company—directors and officers (D&O) insurance. Many mid-sized business owners focus on this coverage to secure another round of funding. However, it’s honestly meant to indemnify executives against lawsuits.
For example, allegations often include breach of fiduciary duty, misrepresentation, mismanagement of shareholder voting procedures, unfair trade practices, and more. If your on-demand company is named in a suit, a D&O policy will defend both the corporate entity and its leadership.
Additionally, many policyholders take coverage further and extend limitations to include employers and volunteers outside of their board of directors, as well. Because D&O insurance has evolved over the years, plenty of options are available nowadays.
Understanding what coverage you need can be a tricky process. Founder Shield specializes in knowing the risks your on-demand company faces to make sure you have adequate protection. Feel free to reach out to us, and we’ll walk you through the process of finding the right policy for you.
Want to know more about insurance for on-demand companies? Talk to us! You can contact us at firstname.lastname@example.org or create an account here to get started on a quote