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Blockchain start-ups are willing to exceed the limits of technology more than we have ever seen before. the speed of technology is moving and it is having difficulty distinguishing between cryptocurrencies and the underlying blockchain technology, making it difficult for startups to buy the appropriate coverage.
However, just because blockchain technology is set to destroy more industries does not mean traditional business protection should vanish, in fact, blockchain startups still need comprehensive insurance packages to protect themselves from claims that may arise as they continue to innovate.
As the CEO of an independent insurance brokerage in Manhattan, I spoke with several startup founders blockchain in an attempt to better assess the risks that their businesses are facing nno addressing and determining the best insurance tools available to protect themselves. Below I present the three types of insurance that blockchain startups should consider for full coverage
(Full disclosure: My company sells E & O, cyber and D & O insurance policies.)
1 . E & amp; O Insurance
Otherwise known as professional liability insurance the error and omission insurance (E & amp; O) will protect your blockchain departure in case you are accused of committing a error and cause. Errors can include a multitude of accusations, including imperfect code or hardware, a missed term, general mismanagement of the project or professional negligence as incomplete or poor work.
For example, if a piece of code causes a network shutdown or security breach, or if a customer perceives that you have not lifted your end of a contract, they can sue you. Consider that 28% of IT projects are considered & nbsp; definitive & nbsp; errors, & nbsp; according to a 2017 PMI report . To protect your reputation and your finances, professional liability insurance helps you pay court costs, defense costs and any due debts.
2. Cyber Liability
This insurance is something that every startup blockchain should investigate, especially if it collects, stores or processes the identifiable personal information (PII) of customers and employees. Blockchain technology includes access information and other personal data that fall within the scope of privacy laws & nbsp; as the general data protection regulation recently implemented in the EU. This insurance will protect companies in case of data breaches and fines or penalties by regulatory authorities.
Policies can also help with the costs of crisis management, data recovery and monitoring, and cost investigation of an infringement. When keeping in mind that the average cost of a data breach in 2018 is $ 3.86 million the need for computer liability insurance becomes clear.
3. D & amp; O Insurance
Originally meant to be for large corporations alone, blockchain startups should consider liability insurance and directors (D & amp; O), especially when they are just starting out. & Nbsp; Indeed, investing in D & amp; Or it may be a requirement for a contract to enter into partnerships with other parties or to obtain investment support.
For example, if you're inviting a director to a position in your board, they'll probably want to be sure they've won their finances if they make a bad business decision while they're in a management role. If a startup has an insurance D & amp; Or, then the company can protect the assets of its directors and members of the board of directors and, by extension, the organization itself from allegations of wrongdoing, as well as defense, damage and settlement costs.
With blockchains the startups interrupt a record number of industries, the founders of startups must find every opportunity to protect their investors, employees and intellectual property.
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Blockchain startups are intent on overcoming the limits of technology more than we've ever seen before. Unfortunately, the insurance industry does not move at the speed of technology and is having difficulty distinguishing between cryptocurrencies and the underlying blockchain technology, making it difficult for startups to buy the appropriate coverage.
However, just because blockchain technology is bound to upset multiple sectors, this does not mean that traditional business protection should fall into oblivion. In fact, blockchain startups still need comprehensive insurance packages to protect themselves from claims that may arise as they continue to innovate.
As the CEO of an independent insurance brokerage in Manhattan, I spoke to several startup blockchain founders in an effort to better assess the risks that their businesses are facing and determine the best insurance tools available to them to protect themselves. Below I present the three types of insurance that blockchain startups should consider for complete coverage.
(Full disclosure: My company sells insurance policies E & O, cyber and D & O.)
1. E & O Insurance
Otherwise known as professional liability insurance error and omission insurance (E & O) will protect your startup blockchain in case you are accused of making a mistake and having sued. Errors could include a multitude of charges, including imperfect or hardware code, a missed term, general mismanagement of the project or professional negligence as incomplete or poor work.
For example, if a piece of code causes a network shutdown or security breach, or if a customer perceives that you have not lifted the end of the contract, he can sue you. Consider that 28% of IT projects are considered outright bankruptcies, according to a 2017 SME report. To protect your reputation and your finances, professional liability insurance helps you pay court costs, defense costs and any due debts.
2. Cyber Liability
This insurance is something that every startup blockchain should investigate, especially if it collects, stores or processes the identifiable personal information (PII) of customers and employees. Blockchain technology includes access information and other personal data that fall within the scope of privacy laws such as the general data protection regulation recently implemented in the EU. This insurance will protect companies in case of data breaches and fines or penalties by regulatory authorities.
Policies can also help with the costs of crisis management, data recovery and monitoring, and cost investigation of an infringement. When keeping in mind that the average cost of a data breach in 2018 is $ 3.86 million, the need for computer liability insurance becomes clear.
3. D & O Insurance
Initially it was thought that it was only for large companies, blockchain startups should take into account the liability insurance of managers and managers (D & O), especially when they are just starting out. Indeed, investing in D & O can be a requirement for a contract to forge partnerships with other parties or to get investment support.
For example, if you invite a manager to a position in your Probably they want to make sure that they do not risk their finances if they make a bad business decision while they are in a management role. If a startup has a D & O insurance, the company can protect the resources of its directors and board members and, by extension, of the organization itself from allegations of wrongdoing, as well as defense, damage and settlement costs. .
With blockchain start-ups that interrupt a record number of industries, startup founders need to find every opportunity to protect their investors, employees and intellectual property.
