Running a startup is a real grind, we live it every day at Anapi! Startups are high velocity, growth businesses that attract awesome teams and investors to push traditional boundaries.
Insurance is both a necessity and an opportunity for startups. Getting the right protection minimises chances of curveballs with a potential to derail the business and brings couple of welcome benefits:
1. Attract investors – investors want to ensure risks are eliminated from where they invest their money. They require companies to get certain types of insurance to keep minimise their risks. Including insurance as part of your data room, signals maturity and foresight.
2. Do more B2B business – many business customers request proof of insurance coverage (eg. professional indemnity) before signing contracts, to ensure your products and services are “safe”.
3. Attract employees – Covid19 is putting an extra focus on employee benefits insurance. As more people worry about their health and mental wellbeing, the competitive employee benefits insurance becomes a tool to attract and retain key talent.
What are the essential coverages for startups?
There are three basic coverages that most startups in Asia opt-in for. As the business scales and risks proportionately grow, the additional pieces are added to strengthen the overall risk posture.
What are the key coverages for startups?
Directors and Officers (D&O): protects board members and company leaders against lawsuits for breach of duty or negligence. Investors want to see startups have D&O insurance in place once they are joining the board. This insurance can also be a useful recruitment tool to attract industry leaders to your team, as they would have the security that they can make decisions on behalf of the business without having to face a personal lawsuit.
Cyber Liability: protects businesses from lawsuits, fines and penalties as a result of a hacking attack or data breach. It also covers other expenses involved such as data restoration and forensic analysis. With the distributed teams, it’s a necessity as the frequency of cyber incidents is increasing and so is the materiality of the impact.
Professional Liability: protects businesses if a third party claims they lost money because of an act, error or omission whilst the startup was providing professional services. In many industries, lawsuits happen whether the associated claims are legitimate or not. The related legal fees are usually high and this insurance protects the startup from these fees.
Employee Benefits
Employer provided medical insurance coverage has become the standard foundation benefit to employees. The main point of providing a medical insurance plan for employees is to protect and support their health and wellbeing so that they can continue to be productive members of the company. It can also be a simple way to reward and attract talent. The basic plans cover Group Hospitalisation and Surgery which reimburses the eligible expenses incurred in the event the employee is hospitalised. Optional riders can be added on to include Outpatient benefits such as GP, specialist and dental. The coverage can also be extended from local to regional or international, and you can also choose to offer the coverage to employees’ spouses and dependents.
Public Liability and Business Property
This is a necessary insurance cover to address the fundamental risks of running a startup. It covers the startup’s liability risks such as slip and falls, damage to third party’s property including rented space, which is often required in tenancy agreements. Property insurance protects the value of important physical assets such as laptops, equipment or stock which is essential to keep your business going.
Workers Compensation
This is legally required in Singapore as part of the Work Injury Compensation Act (WICA) for all manual and non-manual workers with a monthly salary up to S$2,100. It covers employees for work-related injuries or diseases, including their medical expenses, medical leave wages and lump sum payments for permanent incapacity or death.
Where do I get these insurance coverages?
We at Anapi believe in providing our businesses with the best tools to manage insurance using data. Get in touch with us to find out how our tools can help you get covered.
