What founders should know about insurance, from contracts to cyber attacks

Insurance rarely makes it onto a founder's to-do list, which is understandable when you're busy building a product and landing your first customers. But every contract you sign, every person you hire, every funding round and every new market adds risk, and the financial impact of something going wrong grows with it. At our October Lunch & Learn, the team from Concordia walked us through the insurance questions startups run into most, from professional liability and cyber risk to founder protection, employee benefits and international growth.

 

The main types of cover to know about

The right package for your startup depends on what you do, the contracts you sign, your team, your assets and where you plan to grow.

These are the areas most founders will want to look at:

• Professional and general liability, which protects the company against claims from customers and other third parties.
• Workers' compensation, which covers work-related accidents for employees and others who fall under the applicable Belgian rules.
• Cyber insurance, which helps with the costs of responding to incidents such as ransomware, data breaches and system recovery.
• Directors & Officers (D&O), which protects directors against certain personal claims linked to management and governance decisions.
• Income protection, especially relevant in founder-led companies, where one founder's absence can hit both their personal finances and the continuity of the business.
• Supplementary pension and employee benefits, which become relevant from your first hires.
• Property, vehicle and equipment insurance, if you have an office, company cars or significant physical equipment.

💡 Tip: find out what is and isn't covered before you need to rely on it.

 

Check the insurance clauses before you sign a big contract

Customer contracts often come with insurance requirements that are easy to miss. A customer might ask for €1 million in professional indemnity cover when your current policy has a lower limit, so before you sign, check whether that cover is available and what it would cost. Depending on the situation, your broker may be able to raise the general limit on your policy or arrange extra cover for that specific project or contract.

International contracts need extra care. A customer in the US or Canada, or a contract governed by foreign law, can fall outside the scope of a standard Belgian policy or call for additional local cover.

💡 Tip: send important customer contracts to your broker before you sign them. They can check the liability limits, exclusions, territorial scope and any other insurance requirements.

 

What professional indemnity does and doesn't cover

Professional and general liability are separate policies for different types of risk. Professional indemnity can step in when a professional error causes a customer financial loss: if a bug in your software costs a customer money, for example, the policy may cover their claim against you, subject to its terms. It generally doesn't cover the cost of correcting your own work, such as rewriting the faulty code, so it works best alongside solid contracts, sensible liability caps and proper testing and quality control.

 

Who to call when a cyber incident hits

If you're hit by ransomware or a data breach, contact your cyber insurer or its incident-response hotline as soon as possible, and make sure you know who that is well before anything happens. Depending on your policy, that call can give you access to specialists in forensic investigation, containment, system recovery and breach response.

Cyber insurance and professional indemnity do different jobs. Professional indemnity mainly deals with claims from third parties after a professional error, while cyber insurance helps with your own costs after an incident, including incident response, restoration, business interruption and certain data-breach costs.

When personal data is involved, GDPR adds time pressure. If the breach has to be reported, you have 72 hours to notify the supervisory authority, so escalating early makes a real difference.

 

Protecting founders and their teams

If a founder can't work for a long period, statutory social-security benefits often won't be enough to maintain their normal income. Income protection insurance can top this up with a monthly benefit, depending on the policy and its waiting period, which matters most when the company's operations or revenue depend heavily on one or two founders.

As your team grows, the same thinking applies to your employees, and group insurance becomes an important part of the package you offer. Depending on the setup, it can include supplementary pension contributions, death-in-service cover, disability cover and hospitalisation insurance. The percentages and benefit levels Concordia shared during the session were market examples rather than fixed requirements, and before setting up a plan you should check whether a sectoral pension scheme already applies to your employees.

 

D&O matters more as you grow

Directors can face personal claims over decisions they make in their role. D&O insurance protects them against certain claims related to management and governance, covering legal defence costs and, depending on the policy, damages.

It becomes especially relevant once external investors join the company or take a board seat, and investors may ask for D&O cover as part of an investment or financing process.

 

Your own pension gap

For self-employed founders, the statutory pension can be considerably lower than what they earned during their working life. The difference between your income while working and the income you can expect after retirement is your pension gap.

Supplementary schemes such as VAPZ, the supplementary pension for self-employed people in Belgium, can help you build extra retirement capital and may come with tax advantages depending on your situation. When you compare options, look at the net cost and the long-term benefit rather than only at how much you put in.

 

Reviewing your cover when you expand abroad

Moving into new countries usually brings new insurance requirements. Local regulations, what your contracts demand and how your company operates in a given country all determine whether you need local cover, and the US is a market where this comes up often. A broker with an international network can arrange local policies where needed and keep your overall insurance programme aligned.

Internships follow the same logic. Cover depends on the internship agreement, the country and the institution involved, so check each agreement instead of assuming the same cover applies everywhere.