In recent years, startup businesses have drawn unprecedented levels of investment with U.S. venture capital-backed companies raising $329.9 billion in 2021, but as funding grows for startups, so do the risks and the responsibilities to protect the business and its investors, according to Embroker.
The commercial insurance broker reported that insurance costs can increase more than 150%, depending on the type of coverage, as venture capital-backed funding grows. For example, when a startup goes from a $5 million-$25 million range in funding to more than $25 million, director and officer insurance increase more than 155%.