Yaxum Cedeno is an Insurance Broker at Söderberg & Partners

Business Insurance - Essential Protection for You, Your Team, and Your Company

When building a company from the ground up, there are many things to keep track of: financing, growth, product, team, legal matters. Insurance often ends up far down on the priority list, even though it's one of the few things that can save the company if the worst happens.

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Why Is Business Insurance Important?

Insurance is fundamentally protection against the unexpected. It can involve situations like:

• A customer suing your company for an alleged error in your delivery.

• A data breach leading to leaked customer information.

• A board member receiving a personal damages claim.

• A fire in the office that destroys equipment.

• An employee getting injured at work.

In many cases, a single mistake or unfortunate event can be costly, and sometimes even life-threatening to the business. With the right insurance, you don’t have to absorb the full impact yourself.

The Most Common Business Insurance Types - and Why They Matter

1. Liability Insurance (General Liability)
   Protects the company against claims for damages from third parties, for example, if someone claims your product or service caused them financial harm. A basic requirement for most companies.

2. Professional Liability / Errors & Omissions Insurance
   Especially important for consultants, tech companies, or agencies. Covers situations where your advice or solution turns out to be incorrect or causes losses for a client.

3. Cyber Insurance
   More and more companies, regardless of size, are targets of digital attacks. Cyber insurance can cover restoration costs, legal support, PR consultation, GDPR-related fines, and more. Many vendors and partners now require this coverage.

4. Directors & Officers (D&O) Insurance
   As a founder, you can be held personally liable for decisions made, e.g., financial errors, breaches of corporate law, or failing reporting duties. This insurance protects you and other executives legally and financially.

5. Property Insurance
   Covers physical assets, from computers and servers to warehouses and offices. In some cases, it's a requirement from landlords or investors.

6. Business Interruption Insurance
   Covers lost income due to, for example, a fire or operational stoppage when you’re unable to run your business.
   

Common Misconceptions – and Why They Can Be Costly

It’s already risky enough to run a startup - we don’t need insurance on top of

that.

• Actually, it’s precisely because running a startup is risky that insurance matters. It doesn’t add to your risk, it protects you so that one mistake, accident, or lawsuit doesn’t end the whole company.

• Using third-party infrastructure (e.g., Supabase or AWS) doesn’t shift liability away from you. You’re still responsible for how data is handled, secured, and integrated, even if the tools are external.

We don’t have any physical assets.

• Cyber, liability, and D&O insurance aren’t about things, they’re about decisions and data.

Our IT security is solid, so we don’t need cyber insurance.

• Firewalls and multi-factor login aren’t always enough, and without certain protections, you may not even qualify for coverage at all.
  

What Does My Company Need?

It depends on your operations, business model, market, and size. But as a general rule:

• Have external clients? → Liability Insurance.

• Handle tech/data? → Cyber Insurance.

• Have investors or a board? → D&O Insurance.

• Own physical assets? → Property Insurance.

• Rely on uninterrupted operations? → Business Interruption Insurance.

All serious investors understand the importance of insurance, but it has to be the right kind of insurance. It's not about being over-insured, but about covering the real risks that could threaten the company’s survival and value.

What Does It Cost?

It really depends on your size, industry, and risk profile, but to give you a rough idea, small tech or consulting companies often pay somewhere between €300 and €2,000 per year for all coverages together. It can be less for very small businesses, or more for companies handling sensitive data or large contracts. The key is to tailor it to your real risks, so you’re not over- or under-insured. Talking to a broker or insurance company can help you with this.

Summary: Think of Insurance as Part of Your Risk Strategy

A well-thought-out insurance solution:

·         Protects your company’s survival.

·         Protects you as a personally liable party.

·         Builds trust with customers, investors, and partners.

·         Shows that you take risk and responsibility seriously.

FAQ

Q: How does insurance work if you're based in a co-working space?

A: Start by checking your lease. It often clarifies what's not covered, and in many cases, that includes both property and liability insurance. Most co-working spaces only insure the building and shared areas. You're still responsible for:

• Your own equipment (e.g., laptops, monitors).

• Any damage you or your team may cause to others.

Have questions or want help reviewing your coverage? Feel free to reach out!

Yaxum Cedeno

Insurance Broker at Söderberg & Partners

yaxum.cedeno@soderbergpartners.se

+46 768 07 26 78