Business growth can be exciting and daunting in equal measure. As the owner of a digital agency, you will likely have lots of things to consider during this busy time, but your insurance may not be front of mind.
Here are five risks you need to consider when your agency goes through a period of growth and tips on how you can protect your business from the financial implications.
When you go through a period of growth, it can sometimes be hard to keep up as your team takes on more, or bigger, contracts while you’re still hiring for new roles. This can lead to the team being over-stretched and increase the risk of them making a mistake.
In the worst-case scenario, a client could claim that they’ve suffered a financial loss as a result of negligence, leading to costly legal fees. If you lose the court case, you may also be required to pay damages to the client, among other costs.
You can protect your agency from the financial impact of this eventuality with Professional Indemnity (PI) Insurance. So, it’s important to keep your broker updated with any changes to your business that might affect your cover, such as the size of your organisation or the services you are offering to clients.
Sometimes, to accommodate growth you may need to move to bigger offices and invest in new equipment to keep up with demand. This is an exciting step for your agency, but it can mean there are additional risks that you need to consider.
When you start to acquire more equipment for your business, the risk of breakages and theft increases as well. Depending on how specialised the equipment is, this could create financial difficulty for your business if you needed to repair or replace items.
The risk of break-ins or damage may also increase when you move into bigger premises, since you have more to potentially repair in the event that anything untoward does happen.
So, if your business is moving to a larger office, or investing in new equipment to facilitate your growth, it’s important to review two key policies: contents insurance, and equipment insurance. These could help to cover the cost of repairs or replacements if the worst should happen.
Another consideration in these circumstances is that sometimes policies will have additional conditions that you must meet in order for them to cover you. This might involve alarm or security systems, for example. So, it’s important to consult with your insurer or broker to make sure you are adequately protected against these risks.
As you grow, one of the most obvious changes will be to the size of your workforce. As you take on more staff to deliver services to your growing roster of clients, or perhaps begin to work with more contractors or freelancers, the risk of someone becoming injured while working for you increases too.
If this does happen and the individual decides to take you to court over it, you could face some hefty legal fees. This is why all businesses are required to take out Employer’s Liability Insurance if they employ even one person.
However, as you grow, it’s important to review this policy to make sure you still have an appropriate amount of cover for your new, larger business. If you don’t update the policy at key milestones, you could find yourself in breach of your legal obligation.
When you take on more clients, you’ll also need to store certain types of data about those customers to be able to provide your service and create robust marketing plans too, subject to GDPR regulations.
Having more data on file can help you to provide a more tailored experience for your customers, but this is sometimes a double-edged sword. The more data you store, the more careful you need to be about protecting that data from cybercriminals.
If you find yourself in the position of having more customer data on file, it’s crucial that you keep your online systems and security processes up to date. This will make it much more difficult for criminals to access the data illegally and help to keep your customers’ data safe.
Cyber insurance is another way that you can protect your business from the financial implications of a potential data breach or related cybercrime. It’s important to review your policy with your insurer or broker as your business grows to ensure you are adequately protected and to learn more about other ways you can protect against this threat.
As your business grows, the chances are that you will have built a team of directors to support you in running the agency. This is a must for ensuring that every area of the business is taken care of and that the agency as a whole runs like a well-oiled machine.
Having a larger management team, though, does create additional risk. While everyone will strive to live up to the high standards you’ve set for the business, sometimes accidents can happen and mistakes can be made.
If you or one of your directors is accused of wrongdoing by an employee or client, it could lead to costly legal fees and lost revenue. The impact on your personal finances and the business could be significant. Directors and Officers Liability insurance could help to cover the costs incurred if this were to happen so that your bottom line remains unaffected.
Business growth is an exciting time but the risks that your agency could face during this time can be tricky to navigate. If you’d like help understanding how you can protect your business, we can help.