Insurance for science and technology start-ups: how to protect what you’re building
Overview and key points
For science and technology start-ups, insurance is more than a box-ticking exercise — it can support contracts, reassure investors and protect your people, assets and intellectual property needed future growth. We explore the key covers start-ups may need and why specialist insurance advice matters for science and technology businesses.
Key takeaways
Which types of insurance science and technology your start-up might need, including professional indemnity, cyber, management liability, employers’ liability, property, business interruption and IP insurance
Why insurance requirements change as your business grows, from incorporation and funding rounds to product launches, overseas trading and larger contracts
How insurance can support commercial opportunities, helping satisfy client, investor, landlord, laboratory or accelerator requirements
Why specialist advice is important, particularly for businesses working in complex, science and technology sectors.
Insurance may not be the first thing you think of as you work to get your new venture of the ground, but it can be one of the first things a science or technology start-up needs. It can help you meet legal requirements, support contracts, reassure your investors and protect your business from costly setbacks.
There is rarely an off-the-shelf insurance solution for business operating in the complex world of science and technology: A software platform, lab-based research company, medical device developer and specialist engineering business can all face very different risks.
The right advice should be practical, specialist and jargon-free.
What insurance might a science or technology start-up need?
The right insurance and risk management programme will depend on what you do, who you work with, the contracts you sign, the data you hold, your people, assets and stage of growth.
Common areas to consider include:
- Professional indemnity
Designed to protect your business if a client or third party alleges that your advice, design, software, consultancy or specialist service caused them financial loss. - Public and products liability insurance
Public liability helps protect against injury or property damage linked to your business activities. Products liability may be needed if you manufacture, supply, distribute or sell physical products, from prototypes and components to devices or specialist equipment. - Cyber insurance
Cyber cover can help with the financial and practical impact of incidents such as cyber crime, fraud, ransomware, data breaches, system outages and business interruption, depending on the policy. - Management liability insurance
Often including directors’ and officers’ cover, management liability helps protect founders, directors and senior leaders if claims are made against them personally in connection with how the business is managed. - Employers’ liability insurance
In the UK, employers’ liability insurance is generally a legal requirement if your business employs people, including paid, temporary or voluntary workers. - Property, equipment and business interruption insurance
Property insurance can help protect your physical assets such as premises, laptops, servers, lab contents, stock, prototypes and specialist equipment. Business interruption insurance can help with the financial impact if something were to stop your day-to-day operations. - Intellectual property insurance
For many start-ups, intellectual property is central to future value. IP insurance can help with certain legal costs linked to ownership, infringement or licensing disputes, depending on the cover arranged.
How insurance needs change as you grow
Start-ups rarely stand still. The cover that is right at incorporation may need to change as your team grows, you sign your first major contract, raise funding, launch a product or start trading overseas. Insurance should be reviewed as your business evolves, not left until the next renewal.
What investors, clients and partners may expect
Insurance is often a practical gateway to opportunity. Clients may ask for evidence of cover before procurement can progress. Investors may want reassurance that key risks have been considered. Key person insurance is usually an investor requirement before funds are made available. Landlords, laboratories, universities, accelerators, grant providers and event organisers may also set requirements.
Practical steps to get it right
Understanding the risks you face is key to having the right protection in place. What do you sell? Who relies on it? What data do you hold? Do you employ anyone? Do you have physical products, prototypes or specialist equipment? Are you entering regulated environments or overseas markets?
You’ll also need to review contracts for insurance clauses, keep accurate records of assets and activities, and revisit cover whenever there are material changes to your business or its operations.
Arranged well, insurance can help protect cash flow, strengthen contracts, reassure stakeholders and support your business as it grows.
Most importantly, you need to work with an adviser who understands the science and technology sector and can help you make sure that the insurance you have reflects what you actually do and the risks your business could be exposed to.
If you are building a science or technology start-up, the right insurance advice can make a real difference.
Speak to our team of specialist advisers who understand your sector and can help your cover keep pace with your innovation.