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Insurance Considerations for Fast-Growth Companies
By: Christopher R. Rourke
Fast-growing companies possess many attributes that account for their success. They capitalize on speed-to-market by strategically planning and executing on their most important initiatives. As these companies prosper, their exposures to risk often rapidly increase at the same time. If these areas aren’t receiving the same level of attention, coverage protection can quickly become deficient.
Here are some common examples of situations where growing companies need guidance:
- The company has experienced rapid growth over the years, yet insurance limits have remained the same or only risen incrementally. Only inflationary increases have been made without consideration to the consequences of a catastrophe.
Are the limits now inadequate? - The company does increasing business over the internet and/or has a presence on the web, and “cyber liability” coverage has not been investigated.
What is this emerging coverage and does the company need to consider it? - While the operations of the company have changed and broadened, the description on insurance applications/policies hasn’t been appropriately updated.
Could coverage be voided based on this old description? - Similar client contracts are being used now as when the company first started, yet the current relationships and agreements are much more significant and complex.
Are the current liabilities of the company properly being minimized by the wording and provisions in these agreements? - Directors and officers liability insurance (D&O) is purchased, yet there is no idea if the limit is satisfactory.
How do these limits stack up with peer companies? - The company is planning for an eventual exit and wants to fully prepare.
What are the insurance implications? What needs to be thought about early on?
It is critical to partner with a broker who understands these changing dynamics and who actively engages the client in helping to assess these risks and suggest insurance alternatives.
At Aronson Insurance, we work with clients every day on addressing these and other insurance risk management needs.
Christopher R. Rourke is a Senior Vice President with Aronson Insurance. Chris focuses on providing insurance brokerage and risk management services to firms in the technology and business/professional services industries. Prior to joining Aronson in 2006, Chris spent almost five years as a CFO for a large regional insurance broker and ten years with a fortune 100 insurance company. Chris can be reached at (617) 965-3030 (x121) or at Chris@AronsonInsurance.com.
Aronson Insurance is a leading provider of insurance and risk management services. We are located in Newton, MA, and offer a full array of property/casualty and employee benefits products and services. Founded in 1919, we are a regionally focused firm with international capabilities, having over 1,000 business customers from varying industries in our portfolio. Our business clients range in size from small start-up operations to large, well established national and international firms. Additionally, we provide personal risk management insurance services to over 3,500 customers as part of our Private Client Group. Please visit us at www.aronsoninsurance.com