2011 Insurance Seminar
Penn Biotech Group
March 15, 2011
SECTION I.
“Insurance 101 For a Start-up”
Presented by Cohen Partners LLC:
Barry Cohen
Karl Janssen
As a startup, you have a
million things to think
about. Insurance is often
overlooked.
“ I should have reviewed the
contract with both my legal and
insurance professionals before
executing!”
So the question is…..
What types of insurance do I
need for my startup?
Typical Insurance
Coverage Required
by VC Firms and/ or
Customers
General Liability
(Public Liability)
Professional
Liability/ Errors
& Omissions
Directors &
Officers Liability
Workers Compensation
Required once your
company starts payroll
General Liability(Public
Liability)
Legal Liability coverage for bodily
injury/ property damage resulting
from accidents on your premises or
use of your product
Professional Liability/
Errors & Omissions
Coverage for claims from programming
errors, software performance, or the failure
of your work to perform as promised in
your contract.
Directors & Officers
Liability
Financial protection for the directors &
officers of your company in the event
they are sued in conjunction with the
performance of their duties as they
relate to the company
Other Suggested Coverages
Property Insurance including
Business Interruption
Employment Practices
Liability
Cyber Liability/ Network
Security
Contract/ Insurance Pitfalls to Avoid
“One Sided”
Indemnity
Agreements
Improper Risk
Transfer
Unreasonable Limits
of Insurance
“One-Sided” Indemnity Agreements
 Client may ask you to assume liability for
their negligence

Proper Agreement will limit your liability to
the extent your firm is negligent.
 “One Sided” Indemnity Agreements are
often uninsurable!
Improper Risk Transfer

Does your agreement with your independent
contractors or subcontractors clearly state that
they are not employees?

Does your independent/subcontractor agreement
include hold harmless language in your favor?

Does your independent/subcontractor agreement
require that they carry liability insurance with
your firm listed as an additional insured?
Unreasonable Limits of
Insurance
 Frequently the result of an
inexperienced lawyer or risk manager!
 Limits required should be
commensurate with risk and size of
contract!
Conclusion:
Consult with your insurance
professional before signing the contract!
Improper risk transfer can cause your
company to assume unnecessary
liabilities and lead to disastrous results.
Discuss with your insurance agent what
coverages you need for your company’s
current stage of development.
Thank you!