Launching a tech startup — or any startup at all — is a risky venture. According to the U.S. Bureau of Labor Statistics, nearly half of new businesses fail within their first five years.1
There is no silver bullet to prevent a new business from failing, but you can better position your startup for success by identifying and mitigating key risks. Conducting market research, writing a business plan, maintaining financial discipline, and purchasing the right insurance can all help your business survive and thrive.
When you start a business, you can build confidence by picturing success. You might imagine yourself launching a great product, attracting investors, closing deals, and acquiring customers. But to help make your dream a reality, it’s also a good idea to be aware of what could go wrong. If you identify major risks, you’ll be in a better position to take preventive action. Here are some key risks to consider:
Once you identify your company’s most significant risks, determine which actions will help limit those risks. By focusing on risk, you may also be able to improve elements of your business’s strategy. Be realistic as well: It isn’t possible to eliminate all risks. Here are some steps to consider:
Businesses can manage numerous risks by strengthening their operations and taking preventive actions. In addition, many risks can be mitigated with a strong insurance program. An independent broker or agent can help you identify insurable risks and determine what policies are right for your startup. Key policies to consider include:
While you may not need all these coverages, some types of insurance may be required by lenders and customers.
Every business takes risks — and makes mistakes. While a detailed business plan will help keep you on track, it’s important to be flexible as well. Be ready to take quick action to respond to emerging risks. Businesses sometimes must pivot rapidly in the face of setbacks — or to seize marketplace opportunities. In some cases, a successful pivot can be as important as a strong launch for a business to achieve long-term success.
This document is advisory in nature and is offered as a resource to be used together with your professional insurance advisors in maintaining a loss prevention program. It is an overview only, and is not intended as a substitute for consultation with your insurance broker, or for legal, engineering or other professional advice.
Chubb is the marketing name used to refer to subsidiaries of Chubb Limited providing insurance and related services. For a list of these subsidiaries, please visit our website at www.chubb.com. Insurance provided by ACE American Insurance Company and its U.S. based Chubb underwriting company affiliates. All products may not be available in all states. This communication contains product summaries only. Coverage is subject to the language of the policies as actually issued. Surplus lines insurance sold only through licensed surplus lines producers. Chubb, 202 Hall's Mill Road, Whitehouse Station, NJ 08889-1600.
We can help with that.