Some entrepreneurs choose to stay small. The rewards are smaller when you never move your business out of the garage, but so are the risks. To put it one way: You can’t get sued by employees you never hired. There’s nothing wrong with choosing to stay small, but for most of us, the goal is growth. We may start out by selling a few homebrewed apps developed solo or with a few friends, but eventually, we want more than just a spot in the iOS app store, something too big to run on a couple laptops. We want to move into an office, we want to hire top talent at competitive rates, we want to be able to look back and say “I can’t believe we’ve come this far.”
At some point, this means upgrading your insurance. The good news is that it’s easy to know when it’s time to step up your policy. It comes down to this: Have you recently made any investments too big to lose?
You might not need to bother going through the paperwork when you buy a new office chair or upgrade your laptop with some extra RAM, but you shouldn’t wait for major growth to reassess your policy. Suppose, for instance, you’re hiring a freelancer for the very first time since you started your business, and they’re coming by the home office for a meeting. Well, now that you’ve got people coming over in connection with your company, you’re going to need to have some kind of liability policy in place. You don’t need someone twisting their ankle on you doorstep and putting you out of business.
Upgrading your policy has as much to do with exploring new frontiers as it does with your business growing in value. In truth, you might even have a policy that will keep you covered should your company double in value overnight, but will you be covered if you’re shipping out your first physical product and hundreds of units get damaged on the way to delivery?
To put it simply, there’s quite a bit more to being covered than simply making sure that the dollar values are still accurate. As your business grows, it will also change shape, growth is not strictly linear. You will be exploring new avenues of distribution, new ways of developing products and selling services, and you need to ensure that whatever you’re doing, if it involves any sort of risk that you can’t easily cover out-of-pocket, will be taken care of by your policy.
