March 6th, 2017
Launching a startup is an exciting way to cultivate an innovative idea into a growing company using a flexible business model. Between the “lightbulb” moment and achieving viability in your market, you will face many logistical decisions that will ultimately determine the outcome for your startup. From the very beginning, it’s important to have the right protections in place to your organization.
Enrolling in business insurance for startups can help protect your company against a myriad of costly scenarios, from litigation fees to property destruction. Find the right liability coverage for the present and future of your startup with a clear-cut comparison from CoverHound.
General liability insurance is important for businesses even in their earliest stages, and covers legal fees resulting from accidents, negligence, and injuries. One unfortunate accident in your office and you could be facing an injury lawsuit. Commercial spaces often require a certain amount of this coverage before you sign the lease.
Many startups don’t immediately move into a commercial space. What if you’re still in the spare bedroom or garage at your home? As Entrepreneur points out, your homeowners insurance alone won’t cover the risks associated with your business. Your organization will need liability coverage that grows along with it.
One of the biggest expenses for startups is the equipment they need to operate. If you have physical property that could experience damage, you’ll want to insure it under your business plan. What can property coverage entail? The U.S. Small Business Administration lists several instances that could lead to damage, including “fire, smoke, wind and hail storms, civil disobedience, and vandalism.” It’s a wise idea to protect your equipment against scenarios like this with commercial property coverage, and to note that many policies cover lost income resulting from interruptions in business due to damage.
Insuring Products and Services
Offering a product or service to the world does not guarantee that it will work perfectly 100 percent of the time even after extensive product trials. Your liability coverage is important in protecting you from damages potentially caused by your offerings. Zensurance provides an apt example: “A customer gets a rash when she wears the scarf you sold, and sues for damages.”
As your startup grows, so will your to-do list. At some point, you’ll need to bring on employees to handle various departmental tasks. Workers compensation is crucial for protecting your team and your overall organization. Whether an employee suffers an injury on the job or needs medical attention for a long-term problem like carpal tunnel syndrome, workers' compensation coverage coverage will address these claims.
Errors & Omissions
Professional liability insurance, commonly called errors and omission (E&O) coverage, is different than general liability insurance. It covers “intellectual property, privacy, and Internet services negligence which causes financial or other no-tangible loss to a third party,” according to Business Insider. Startups that engage in fields like consulting or advertising will want to pay special attention to their professional liability plan to make sure it’s up to scratch.
As the leader of a startup, it’s up to you to protect your growing business from the beginning through all the subsequent stages of expansion. CoverHound can help with that. Learn more about business insurance for startups — including cybersecurity insurance from our sister company CyberPolicy — today!