Digital Risks is a new insurance brand, focused entirely on the needs of start-ups and freelancers in the digital and media space.
We spoke to its co-founder, Cameron Shearer, about the drivers behind the business and the risks that businesses and freelancers need to watch out for.
Where did you get the inspiration to start Digital Risks?
I was working for a technical advertising company in Australia when I realised there was a need for a new type of insurance company.
I was trying to organise the professional and cyber policies that our big clients were demanding, but couldn’t find a provider that understood our business, could explain what we needed and advise us on the best options. It was at this point that I met my co-founder Ben, who worked for the company we eventually bought cover from, and we came up with idea of starting an insurance brand.
We wanted to make buying insurance easy and accessible for smaller businesses in the tech and media space, with features such as a monthly subscription model to better align to how they operate. We both knew that the opportunity was in London so we decided to move here. Soon after, Digital Risks was born!
The insurance industry is famous for being behind the times - are things changing?
Insurance definitely has a reputation of being stuck in the dark ages! When people think of insurance, they usually think of complexity, confusion, jargon and poor customer service. In a world where customers have become accustomed to getting what they we want at the touch of a button, it seems unnecessarily clunky and convoluted.
Insurance has been particularly out of touch when it comes to serving businesses, failing to provide products that meet their digital needs or cover the risks they face today. With so many businesses based online, issues such as cyber-attacks and data breaches have replaced fires, thefts and floods as the biggest concerns. Meanwhile, co-working and the gig economy have brought other new risks. Yet insurers have been slow to respond to these threats, or do so in a way that suits fast-growing businesses.
Thankfully, things are changing and a new generation of InsurTech start-ups has come on to the scene, challenging the status quo. At Digital Risks, we’re on a mission to make insurance simple and straightforward for start-ups and SMEs. Our digital first offering removes the complexity of buying insurance, while our policies have been designed to protect against new risks coming to the fore.
Our products are also designed to be as flexible as possible, with a monthly subscription model that allows customers to change or cancel at any time. So, you have more accurate cover and only pay for what you need. We also provide ongoing advice and support so start-ups and SMES can reduce their exposure and the chances that they’ll need to claim.
What new digital risks should businesses and freelancers be aware of?
Cyber-attacks and data breaches are a regular feature on the news, but it isn’t just big businesses and governments that are affected. Research by the Federation of Small Businesses found that two thirds (66%) of small firms have been a victim of cyber crime in the last two years, with those affected hit four times on average. Attacks cost businesses an average of £3,000, with system downtime, reputational damage, legal fees and fines to consider. That’s why having the right controls and protection in place is vital.
Those who publish their own content, or are active on social media, can also open themselves up to claims of defamation, breach of confidentiality as well as issues around copyright and intellectual property (IP). That can happen if you or one of your employees posts a damaging comment about an individual or another business, or if you use third party materials such as images and music without the appropriate permissions.
Of course, alongside these new digital threats, the old business risks are still there, including fire, thefts, floods and good old-fashioned accidents. They may not be the nicest things to think about, but preparing for the worst means you’re in the best position to cope and recover if anything does happen!
What insurance policies should be a priority for start-ups and SMEs?
There are a number of key policies you should be looking at: • If you’re an employer, you’re legally required to have employers’ liability insurance (EL) and can you face a hefty fine from the Health & Safety Executive if you don’t have it. EL will protect you if one of your employees suffers an illness or injury while working for you, covering any legal expenses and compensation if you’re found liable.
• Then there’s public liability insurance (PL), which covers you if you or one of your employees causes an injury or property damage to a member of the public. This can be at your office, visiting a client or at an industry event.
• Another basic consideration is contents insurance, which will protect your belongings in the case of loss, damage, fire or theft. Unlike many insurers, at Digital Risks our contents policy also covers businesses based in co-working spaces. You just need to keep your belongings in a locked office, locker or desk drawer when you’re not around.
• Anybody offering a professional service or advice should also consider professional indemnity insurance (PI), which will cover you if you make a mistake, or if a client suffers – or claims to suffer – a financial loss as a result of your work. PI will pick up the bill for any legal and compensation costs and some clients will even insist you have it – so it could even help you win business.
• Directors' and officers' liability (D&O) is one of the most important policies a digital business can buy. Many founders don’t realise that, even as a director of a limited company, you can still personally face legal action, fines, or even prison sentences! D&O covers allegations that you have personally done something wrong, paying for any legal costs and fines that may result.
• With cyber-attacks on the rise, cyber liability insurance is also worth serious thought. It will cover you for breach of data protection laws (where insurable by law) and your liability for handling data. Plus, you can also get cover for extortion, system rectification costs, plus PR expenses and financial loss due to system downtime.
And what about freelancers - do they need to worry about business insurance?
While their operations are obviously much smaller, freelancers can be affected by many of the same risks that face any business, such as theft, cyber-attacks and legal claims. Getting the right insurance will give you the peace of mind that you’ll be back on your feet quickly if the worst does happen.
Your exact needs will depend on your area of focus, but key policies to consider include public liability, professional indemnity, contents and cyber insurance. Make sure you choose a policy designed with freelancers in mind, so you don’t end up paying more than you need to. For example, if you only work for part of the year, you can save money by choosing a subscription-style model that allows you to cancel at any time – such as that offered by Digital Risks.
What does the future hold for Digital Risks?
Our goal for 2017 is to become a real contender in the UK market. We launched our professional products in August last year and, with more funding on the horizon, we’ll be launching some exciting marketing campaigns this year, as well as joining forces with some new delivery partners. In the next five years, we’ll have expanded the business internationally and be established as a serious player in the insurance market.