Why Is Insurance for Startups Important?
Businesses face lawsuits and liability claims every day. As you start yours, you’ll want to consider the potential risks you may face and know what your state requires for insurance
. Remember that without coverage, you’ll have to pay out-of-pocket for damages or legal claims filed against you.
The price you pay for coverage will depend on your business, because the business insurance cost for a startup varies by industry
. For instance, companies with higher risk levels will need to pay more for their premiums. This means a construction business would have a higher insurance price than a tutoring company.
Types of Business Insurance for Startups
Business insurance for startups
varies based on the size of your company. A small, self-funded startup may require different coverages than a business worth $30 million.
Your company will likely need multiple insurance policies. To make sure you get the right insurance, we recommend getting a Business Owner's Policy
. This policy bundles property and liability insurance together, which can be convenient to manage and can also save you money.
Seguro general contra terceros
- Lesiones corporales
- Daños a la propiedad
So, if a customer slips and breaks their ankle on your business’ property, your general liability insurance can help pay for their medical treatment.
Seguro de propiedades comerciales
For example, if a fire causes property damage to your business’ inventory, this insurance can help pay for the repairs or replacement costs.
Seguro de responsabilidad profesional
Professional liability insurance for startups
, also known as errors and omissions coverage, helps pay legal fees when your company makes a mistake in the products or services you offer. So, if your employees give false financial advice to a client, this coverage can pay the legal expenses associated with the claim they file against you.
The answers to these two common questions may help you decide if you need professional liability insurance:
Seguro para la pérdida de datos
- Identity protection solutions
- Las relaciones públicas
- Legal fees
This coverage also helps you respond to a data breach
as soon as possible, restoring the public’s confidence in your business. Keep in mind that this insurance protection can be important even if your business is at a low risk of data theft
Seguro comercial para automóviles
Commercial auto insurance for startups
, on the other hand, helps cover you or your employees if you’re at fault for an accident while driving your company vehicle. It doesn’t, however, protect employees if they drive their personal cars for work purposes. In cases like this, you’ll want non-owned auto
coverage. This extends your commercial auto policy above and beyond what your workers have on their personal auto coverage.
On top of a non-owned auto endorsement, you can also get specialized commercial auto coverage
. This includes electronic equipment insurance to help cover GPS or DVD units you install in your cars.
Workers’ Compensation Insurance
Workers’ compensation is required by law in most states. This coverage is important for providing your employees with benefits if they suffer a work-related injury or illness. These benefits can help pay for your employees’:
- Atención médica
- Lost wages
- Funeral expenses
Seguro comercial suplementario
If you know how a personal umbrella coverage policy works, a commercial one works similarly for your business. However, instead of extending policy limits for home, renters or auto, it gives your business extra liability coverage. We’ve put together a whole page of details if you’re wondering exactly what commercial umbrella insurance is
- Legal fees
- Medical bills
- Damage expenses
Business Travel Insurance
If you or your employees travel frequently for work, business travel insurance
can help ensure you’re protected. This coverage will help pay losses if plans change or a disaster strikes. Typically, its protection for employees
falls within these types of travel coverage:
- Trip cancellation
- Medical insurance
- Evacuation insurance
- Baggage and personal items loss
- Seguro de vida
Some travel insurance basics
to keep in mind are that prices vary based on the amount of coverage you need, and rates increase for those over the age of 50.
Seguro comercial contra inundaciones
There are certain coverages that are only important for specific businesses, like commercial flood insurance for startups
. This policy helps cover your company if flooding damages your:
You’ll want to buy this policy separately from your commercial property insurance. But how do you know if you even need it? Your location is a big factor in whether you should carry flood insurance. It would be in your business’ best interests if:
- You’re located in a state with heavy snow
- Your area is prone to flooding in the spring
- You have significant amounts of rainfall during the year
Startup Business Insurance Costs & Deductibles
The cost of business coverages vary depending on the types of insurance products you need and the amount of protection each one offers. This means higher risk companies like a construction startup will likely pay more for their insurance coverage than businesses like retail stores, where there is less danger on the job.
- Comparing coverages, because not every startup needs the same insurance protection
- Bundling policies to get a discount when you have more than one policy with the same provider
- Driving safely, because a good claims history can keep your auto coverage premium from increasing
- Looking into discounts, because insurance companies offer a range of savings options
As you buy business insurance coverage, you should also be aware of your deductible. This is the amount you’ll pay out-of-pocket for a claim before your insurance company covers the rest of the expenses up to your policy limits. Usually a higher deductible can save you money on your premium, but you’ll pay more out-of-pocket if you need to make a claim.
Additional Resources for Safeguards & Insurance for Startups