Insuring Success: 7 Insurance Essentials Post-Raise

1 – Protecting your senior team and stakeholders

First up on the agenda: your shareholders’ agreement. Think of it as the legal backbone of your company’s governance structure. Within it, you’re likely to find key insurance requirements that directly impact the protection of your team and shareholders – concerning your Directors’ & Officers’ (D&O) policy and Corporate Legal Liability (CLL) policies in particular.

Even if you already have D&O and CLL insurance in place, a fresh injection of capital and potential new shareholders on board calls for a thorough review of your existing policy; you want to make sure you’ve got the right protection in place for everyone involved. Depending on what’s covered and any exclusions that apply, you might even need to replace it with an entirely new policy, to make sure you have the correct protection as you grow.

2 – Fortifying new ventures

When it comes to scale-up companies, expanding often means setting up new subsidiaries, or venturing into new territories or even industries. As your business grows and performs new functions, key people could face more risks, and you might need to comply with additional rules or regulations. What’s more, new capital can also lead to new acquisitions – which will need to be covered by your insurance programme.

At this time, it’s crucial that your insurance policy keeps up with your new growth, and that your additional ventures are included within your cover. You should also keep an eye on your Management Liability insurance – regularly revisiting it to protect your leadership team as your business evolves.

3 – Navigating international markets

Expanding overseas? It’s common for post-raise companies to venture into new territories, which is why it’s important to tweak your policy to meet the challenges of global operations. If you’re expanding into the US, for instance, it’s likely your risk profile will shift due to the country’s litigious nature.

A good broker who is clued up on the ins and outs of various international regulations and risks can help you customise your coverage to fit. Remember, each market has its own challenges and laws, so staying flexible is key. You should also consider how having teams in different countries affects your insurance and what local insurances are legally required in each country. With people positioned all over, there’s also a higher chance of unexpected problems so tackling these risks head-on, can help protect your business post-raise.

4 – Building trust with clients

As you win more customers and contracts, your business can expect to see a higher number of claims. Here’s where it pays – literally – to check your Professional Indemnity and Cyber Liability limits post-raise to make sure your cover is adequate.

If you’re wondering what Professional Indemnity insurance is, imagine you’re a consultant, designer, or any kind of professional offering advice or services to clients. No matter how skilled or careful you are, mistakes can happen. Sometimes, these mistakes can lead to unhappy clients, financial losses, or even legal claims against you.

Professional Indemnity insurance acts as a safety net. It protects you if a client claims that your advice or services caused them a financial loss. This insurance can cover the cost of legal fees, settlements, or damages.

Investing in Professional Indemnity insurance and Cyber insurance ahead of time not only keeps your business safe from possible problems post-raise, but also builds trust with your customers and others involved in your business.

5 – Understanding digital risks

Upgraded your tech stack? Think about how the technology you use might affect your insurance coverage.

- Cyber Liability equips you with expert advice and financial support to tackle cyber attacks and data breaches, including incident response, to quickly get you back online and trading again.

- First-Party Cyber coverage protects you against losses from cyber attacks and data breaches on your systems or networks.

- Professional Indemnity can include cover for technology errors and emissions, protecting your business if someone says you’ve made a mistake in your work as a result of a new tech or software.

Revisiting these insurance policies to make sure they’re adequate post-raise gives you peace of mind as you grow. Even better, cybersecurity training from providers like CFC can equip your staff with the knowledge to prevent the most common cyber losses – like clicking on an infected link.

6 – Scaling your workforce

Scaling your workforce is a hallmark of growth. It also means you should consider new insurance policies like Professional Indemnity and Employers’ Liability coverage. Employers’ Liability coverage protects you from claims by employees for work-related injuries or illnesses, which become more likely as your team grows.

Employment disputes is an area that often sees claims, making Employment Practice Liability insurance an important safeguard for your growing business. It covers issues like wrongful dismissal, discrimination, and harassment – providing essential protection as you scale and restructure.

Another thing to think about as you expand is Diversity and Inclusion (D&I). Making a commitment to D&I early on builds a stronger, more inclusive workforce and can help protect against discrimination claims.

7 – Securing your supply chain

Supply chain dynamics play a critical role in the success of any business – especially if you’re growing fast and introducing new products from various locations following a raise. That’s why it’s essential for you to team up with your insurance broker to identify and limit risks linked to changes in your supply chain – as well as your technology service providers.

Working together with your broker enables you to carefully examine risks, uncover weak spots, and make plans to strengthen your supply chain. Plus, your broker should have a wealth of knowledge about risks and what’s going on in your industry. They can help you prepare for any surprises, like problems with suppliers, shipping delays, or natural disasters, for instance.

Ready to grow? Protect your business’ future with Capsule

As your business takes off, getting your insurance right is crucial. Paying close attention to these insurance basics sets you up for success in the ever-evolving world of entrepreneurship.

At Capsule, we know how important it is to protect your business as you grow rapidly. Our team is ready to support you at every stage.Reach out to us today.