Technology Companies

Special characteristics of the tech industry

As a rule, technology companies such as biotech, pharmatech and meditech companies are characterised by a number of specific features that require special attention in terms of insurance cover. This is where we, as insurance brokers, come in, in order to be able to offer insurance cover specially tailored to the needs of technology companies. Below is a small selection of these special characteristics and their influence on insurance cover.

Special financing structure

Today, companies can have a complex financing structure. Whereas in the past the classic bank loan was often applied for, today it can be a mixture of equity, debt, mezzanine financing, venture capital, private equity and certain funding/subsidy and grant programmes. This has a significant influence on risk management, the necessary insurance policies and their design, as capital providers usually require a hedge for their investment. This can be achieved by implementing and adapting the following insurances. Of course, the entrepreneurial risk cannot be insured.

• Directors and officers liability insurance (D&O)
• Liability insurance
• Legal protection (manager legal protection)
• Payment protection insurance
• Term life insurance

Keyman problem

It is often the case in research and development that a large part of the knowledge and enthusiasm for advancing research in order to increase knowledge is distributed among a few people in the institution or company. This makes the loss of such a person due to illness, disability or death a very high risk for the institution and a double burden, as in addition to the private level of the key person, the institutional level can also be affected financially if the key person is absent for a longer period and no adequate replacement can be found.

• Keyman insurance
• Term life insurance

Human capital of particular importance

Human capital is probably one of the biggest assets in such companies. There is a lot of personal knowledge that the company or institution should retain in order to remain competitive or to continue to fulfil its research mission. In practice, a hybrid strategy of employee satisfaction and the implementation of knowledge databases has become established. Insurance can help with both.

• employer-funded pension
• company health insurance
• Group accident insurance
• Electronics insurance / machine insurance
• Commercial property insurance

Scientists and Tekkie vs. Insurers

Internally, we like to call it the translation problem. In practice, we experience time and again that the world of action, language and ideas between the New Economy and the insurers are completely different. A scientist or tekkie will hardly understand the point of view or the language of the underwriter at the insurance company and vice versa. This sometimes has a big impact when it comes to insurability. This is where we see ourselves as a kind of translator and package the operational purpose in as insurer-friendly a way as possible so as not to jeopardise insurability. We translate "tekkie - insurer" and "insurer - tekkie".

Patents and trademarks

The intellectual property of the company or the acting persons usually represents a large intangible asset. Special attention should be paid to the protection of intellectual property through patent and trademark rights. It does not matter whether it is a patent, utility model or design patent. In the course of competition, it very often happens that such intellectual property rights are disputed. In the course of risk management, it is important to insure the legal costs of such disputes and, in the event of an infringement of intellectual property rights, to insure the costs of damages.

• Patent liability insurance
• Patent legal protection insurance

High vulnerability to cyber risks

Due to the high level of technology and digitalisation in such companies, the risk and danger of cyber attacks is naturally higher than in traditional commercial companies. Regardless of whether cyber risks arise from criminal acts or non-criminal acts. Every company up to a certain level of technology and IT use should protect itself against such cyber risks.

• Cyber insurance (Cyber liability, cyber damage insurance, cyber cost insurance)

Problem solver vs. vendor's tray

At the end of the day, clients want to experience their insurance broker as an actual problem solver and not as someone who comes with his insurance belly shop and offers standard solutions. This requires a high level of expertise and scientific know-how. 

If you find yourself in this situation, please feel free to contact us. We are at your side with advice and support!