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Professional liability insurance a must if workers are pursuing side projects

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Considering the question of whether or not an employer should allow an employee to work on a side business, Entrepreneur magazine consulted Gregory Fairchild, an associate professor of business at the University of Virginia's Darden School of Business, who said it is based upon the nature of the employee agreement.

Fairchild told the magazine that even explicit agreements can have a lot of gray area, and when he allows employees at Darden to pursue other projects, there are times he is overruled by other members of the staff.

According to Fairchild, the question of employees pursuing outside work can be especially tricky for start-ups, where employees may want to hedge their bets by keeping up with other projects until the new company is off the ground, but where intellectual property matters can be sensitive, as new businesses are often built on novel ideas. Entrepreneurs who want employees to ask for permission to pursue other projects should be sure to have the proper professional liability insurance to protect intellectual property and other trade secrets and sensitive information.

According to Fairchild, the best way for an employee and employer to be on the same page when it comes to pursuing other projects in mutual transparency. With everything on the table, both parties will know what ideas are fair game, and which are confidential.

A recent IT-Director.com article by Nigel Stanley, practice leader of IT security at Bloor Research, also stressed the importance of protecting intellectual property.

Stanley also said that having professional liability insurance to protect intellectual property guards against damage that can be caused by cybercriminals. Often times, physical property is much easier to protect than less tangible types of property, Stanley said.

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