D&O insurance essential for tech firms & start-ups
Anzen 101
Tech companies thrive on disruption and speed. No one has time to spare in the early stages, and your best people are wearing multiple hats. Securing strong management liability insurance coverages can help ensure that you and your fellow executives aren’t on the receiving end of disruption—professionally or personally—through costly and time-consuming lawsuits.
Directors & Officers, or “D&O” insurance, is a must-have coverage for tech founders and their directors and officers. D&O specifically provides “a type of liability insurance covering directors and officers for claims made against them while serving on a board of directors and/or as an officer.” Policies function “as ‘management errors and omissions liability insurance,’ covering claims resulting from managerial decisions that have adverse financial consequences.”
“As soon as fundraising begins in the tech start-up world, D&O becomes essentially a mandatory insurance product,” says Max Bruner, Anzen’s Founder & CEO. “Tech founders are in a permanent hustle mode from their seed days and can be particularly vulnerable to executive risk exposures without necessarily realizing it.”
And in 2023, costs are escalating for D&O litigation.
Like most work stressors, D&O exposures aren’t something you can just leave at the office. Litigious parties may try to target your personal assets in lawsuits. Fortunately, even executives being sued as individuals are covered in most comprehensive D&O insurances.
“Tech company leaders can be exposed to lawsuits from their own investors and employers as well as regulatory bodies,” says Anna Beach, co-founder and Chief Insurance Officer at Anzen. “In addition to the importance of procuring solid D&O coverage from experienced underwriters, the tech C-Suite sees added benefit when they choose a tech-enabled insurer like Anzen, who integrates proactive risk prevention into the relationship.”
Anzen’s technology offers a holistic look into your operations and organizational risk, integrating with customers’ existing Management Ops processes—such as onboarding and offboarding, compliance, employee documentation, and finance and cap table management—to monitor, mitigate, and benchmark a tech company’s exposures.
Taking recommended actions to close gaps will result in an improving score, and ideally, “we provide you with the tools you need to avoid filing claims against your insurance at all,” says Bruner.
