Running an on-demand app it’s just like any other business. Which means,
you should absolutely have insurance to protect your business
A successful on-demand application creates a marketplace where hundreds or even thousands of service providers fulfill the needs of buyers every day. That’s a lot of transactions. Who pays when something goes wrong? The service provider? What if they can’t or are unwilling to pay? How do you manage that risk?
As your business grows you need to protect what you have built including your office, equipment, an indispensable employee or partner, your goodwill and most importantly, yourself. To protect these assets and to protect your business from potential risks, you should consider getting insurance.
All businesses take some risks, but taking too many risks or failing to protect yourself does not make good business sense. Would you have sufficient cash on hand to deal with any business emergency that could arise? In many cases, the answers to these and other questions about risk is “no”. The simple answer? Control what risk you can and insure the rest.
Types of Insurance
Insurance needs vary greatly and it is best to get advice from an insurance broker or agent who is familiar with your on-demand business. Below are different types of insurance that may apply.
Business Property and Income Insurance
You need to protect your assets and earnings in the event that an emergency destroys part or all of your business premises and assets including the following:
- Property insurance — Property insurance will cover the real property owned by your business in the event of damage due to things like fire and other perils.
- Contents insurance — This covers assets that you store at your business premises. If you are leasing space, the owner probably has property insurance, but you are likely responsible for your own contents insurance.
- Business interruption insurance — If you need to shut down your business temporarily due to a technical issue, business interruption insurance will cover your loss of earnings until you are back in business.
- Vehicle insurance — You will need to insure vehicles your business owns.
Mistakes happen. You, your service providers or your on-demand platform itself could be the cause of mistakes that ultimately end up hurting your buyers or other people who involved with your on-demand business. To protect it from being sued, you should consider these types of insurance to limit your liability:
- General liability — Covers injury to buyers or service providers using your on-demand platform.
- Product/Service liability — Provides protection in the event that the services are defective or cause serious harm to those receiving them
- Professional liability insurance — Provides protection if you are sued by a buyers for errors, omissions or negligence, when performing professional services
- Cyber liability — Protects in the event of a lawsuit stemming from an electronic security breach involving compromised personal or commercial information.
Assess your Risks and Get the Right Insurance
Reach out to an insurance broker to develop an insurance plan that is right for your on-demand business. You may also wish to contact your local industry association, as some organizations offer members lower rates on their business insurance.