Startup businesses are often an exciting place to be, because when you’re starting up it can seem like the only place to go is, well, up. Startup businesses depend on good ideas, strong leadership, market opportunity and….insurance. Actually, startup businesses are sometimes more in need of insurance than big companies because when you’re starting small, one lawsuit could knock you out of the park. Startup businesses need insurance to protect themselves, insurance to protect and attract quality employees, and insurance to offer their budding customer pool. As a startup business here are insurance types that you’ll want to be aware of.
General Liability Insurance- This is your first, and maybe most important insurance. General Liability insurance protects you from any lawsuits regarding your business space (office equipment damages, on-site accidents), copyright infringement, or reputation damages. General Liability insurance will cover attorney, investigation, medical, plaintiff, and bonds costs. There are lots of top-tier insurance companies that you can team up with on this one.
Business Property- Natural disaster, fire, and theft protection for your business location(s), equipment, and inventory. In case of equipment breakdown, (especially if, as a startup, you didn’t buy all new equipment), business property insurance will cover you like regular appliance insurance. For small businesses, this insurance shouldn’t amount to more than $1000 a year, but don’t cut corners because if you lose your equipment and don’t have insurance…you’re pretty much back to square one.
Business Auto- Auto insurance for your company cars. If you don’t have company cars, you’re good! If you do, get Business Auto Insurance, they are likely the most important pieces of equipment you have.
Cyber Insurance- You’ll want to cover you online assets too. Startup are particular targets for data breaches and identity theft. Contact an experienced broker so you can be sure to get all the cyber coverage you need at the most reasonable price.
Product Liability- Unfortunately, even with warning stickers, people will always find ridiculous ways to injure themselves. Product Liability will protect you from lawsuits from customers who have managed to injure themselves with your product. This cost will look like about 0.025% of your revenue
Business Interruption- This insurance will cover you while your company gets back on its feet after a natural disaster. Again, negotiable and not too pricey, especially for small businesses.
For Your Employees
Worker’s Compensation- Unless you’re in Texas, this one is legally required. If one of your employees is injured or falls sick due to workplace conditions, this insurance will cover their salary and medical bills while they are indisposed. If your employee decides to sue you, this insurance will protect you. As a startup, you’ll probably be wanting to keep as good a relationship as possible with your employees as well as the government, so don’t forget this one. Luckily, you can combine your Worker’s Compensation Insurance with Employment Liability Insurance, protecting you from discrimination, sexual harassment, or wrongful termination lawsuits. Again, there are lots of providers for this kind of insurance.
For Your Customers
Quality control is the first insurance you can offer your customers. Don’t just think about the quality of the products or services you are providing, also look at the quality of your customer service. Take a special look at the quality of your communication, the better your customer understands you and your services/products, the more likely you are to transact business without any hiccups, misunderstandings, or lawsuits. As you keep up your quality control, customers will be pleased and recommend you to their neighbors and friends.
Any warranties or compensatory guarantees that you offer your customers will help you retain customer good faith and loyalty. If your competition offers warranties, you definitely want to offer one, so customers can see that you are just as reliable. Just remember to be specific in your warranty terms so you don’t get taken advantage of.
by: Dennis Hung