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How important is a Professions Error & Omissions Liability Insurance for the web startup's executives?

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(Agent, JKS Solutions, Inc.) |

As important as if you were an executive or officer of a non web startup.

What ever you can be held personally accountable for to the public, whether its insufficient funding of payroll taxes to outright financial statement fraud, or some misstep you made that puts you in hot water, you will need coverage. Including coverage to cover the cost of your defense.

It might be time for you to seek legal counsel from a business lawyer who can bring you up to speed on this topic. Coverage and types of insurance based on your personal risk tolerance will vary by state.

Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

E&O is very important to ensure your protection. I just caution all that they need to read the fine print as not all insurance is the same. Know your coverage. Good luck.

Ted Monohon
Title: VP -Finance / Controller
Company: Fantex
(VP -Finance / Controller, Fantex) |

It should also be noted that a web presence brings other liabilities that are not covered by traditional E&O insurance such as being hacked and losing customer data. You need a special Cyber Liability policy to cover those risks. Talk with an attorney and a commercial insurance salesperson to understand all your risks and coverage options.

W Lee Penn II
Title: CFO, CCO
Company: Protocol Driven Healthcare Inc
(CFO, CCO, Protocol Driven Healthcare Inc) |

Since the application you are creating is considered the output of a skilled professional, it is very likely that your clients will ask you about and may even insist that you have this coverage in place. Completing the application for coverage and responding to the inevitable questions from the underwriter in that process will teach you about the risks perceived in your business model. Your clients will be interested in how you manage those risks.

Make sure that you also have directors and officers liability coverage as well.

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