No city in the country has a higher concentration of college-degrees than San Francisco, so it's no surprise that this city has been at the forefront of tech development and entrepreneurship for decades. Though it's been years since the Gold
Rush and the '49ers (the miners, not the football team), San Francisco is still filled with the same entrepreneurial start-up spirit.
What Bay-Area Companies Require Small Business Insurance?
Almost every business is required by law to purchase some insurance policies. Additionally, many contracts require you to carry certain coverage. Whether you run a startup mobile development company in Oakland or freelance in Fremont, the following insurance
policies provide important coverage for IT companies:
General Liability Insurance is the Swiss Army knife of insurance policies. It has many functions, covering a variety of common business lawsuits. However, it only covers what are called third-party lawsuits – disputes from people you don't
employ. These lawsuits include allegations of property damage, personal injury, slip-and-fall accidents, advertising injuries, and others. For example, if a customer slips on your floor and breaks their hip, General Liability Insurance covers the
cost of a lawsuit, paying for lawyers, legal expenses, and the damages you owe the injured party.
A Business Owner's Policy (or BOP) gives San Francisco small businesses two insurance policies – General Liability coverage (see above) and Property Insurance – at a reduced cost. Buy them together and you'll save money on your
premiums. BOP Property Insurance covers equipment, technology, and physical property your business owns. For example, if a fire burns down a tech startup in the Mission District, Property Insurance pays for that business to repair or replace lost
property. In addition to covering fire loss, Property Insurance covers theft, vandalism, and some weather damage.
Tech companies need Errors and Omissions Insurance because it covers lawsuits that clients file about your work. For example, if software you develop has flaws and causes your client a loss, E&O Insurance can pay for the resulting lawsuit. Or if the
consulting you do leads to a data breach on your client's computers, E&O Insurance can pay for the identity theft lawsuit. (This policy doesn't cover data breaches on your own network. See Cyber Liability Insurance for more
information). Many IT contracts specifically require business to have E and O Insurance.
California requires employers to have Workers' Compensation Insurance (also called “Workers' Comp” or “Workman's Comp”), and our agents will make sure you're in compliance. Workman's Comp pays for medical
expenses when an employee is injured on the job. It also covers the wages employees lose while they are recovering. Additionally, many Workers' Comp policies come with Employer's Liability Insurance, which pays for Workers' Comp lawsuits
in the event that an employee forgoes benefits and decides to sue your business instead.
Cyber Liability Insurance (aka “Cyber Risk Insurance”) pays for your response to a data breach on your network. This insurance is only important for businesses that store private data on their networks. That means that some mobile app companies,
big data analysts, web hosts, and other IT companies need this coverage. If your business doesn't store client data on its network, Cyber Liability Insurance is probably unnecessary. (Remember: E & O Insurance covers data breach lawsuits
when a client is hacked.) Cyber Risk Insurance can cover many data breach expenses, including identity theft prevention, investigations, PR consulting, and the cost to inform affected users of the breach.
To learn more about how these policies protect your specific business, contact one of our insurance agents. Call us at 1-800-668-7020 or submit an online insurance application,
and we'll send you a free quote with an insurance plan customized for your business.