It takes a lot of money, energy, and time to turn a business dream into a dream. Therefore, it stands to reason business owners should do everything possible to protect their hard work. This is where startup business insurance comes in. In most cases, small business owners are legally required to carry certain types of business insurance before opening their doors to customers. But what business insurance do you need to protect your startup? How can you get the best rates? This post seeks to answer these questions and more.
What Business Insurance Do You Need to Protect Your Startup Business?
Small businesses have access to various insurance covers to protect against different dangers. Types of business insurance for startups include;
General Liability Insurance
State laws don't require you to have a general liability cover. However, not having one can put your business in financial jeopardy if your business is sued for personal injury, property damage, or bodily injury.
A general liability policy protects against claims that may come up during regular business operations. This includes bodily injury your business may have caused, including slips and falls. This type of business insurance also covers property damage from employee accidents like breaking furniture or a window while working at a client's property. General liability insurance can help you pay for a personal injury claim's negative impact on your startup. It may also include advertising injury, which occurs when a rival company challenges a startup's marketing claims to be more intelligent, faster, and preferred by most people.
Professional Liability Insurance
A professional liability insurance policy is designed to protect businesses that offer professional services against negligence or other claims initiated by clients. People with expertise in a specific area like lawyers, accountants, and doctors are legally required to carry professional liability coverage. General liability insurance doesn't protect against malpractice, negligence, and misrepresentation claims.
This policy may have different names depending on the profession - errors and omissions insurance for real estate agents and medical malpractice insurance for medical professionals. It only covers claims made during the policy period.
Workers Compensation Insurance
Workers' compensation is one of the most important business insurance coverages you'll ever invest in. Besides being a legal requirement, workers' comp offers financial protection if employees sue your company for an on-the-job injury.
When accidents happen, the affected employees may sue for financial coverage of medical costs and missed wages. Former employees may also file lawsuits alleging that they were unfairly laid off or that workplace conditions caused harm. This type of liability coverage protects against financial losses when paying for medical expenses, death benefits, and disability benefits.
This cover reimburses property owners or renters if damage to the structure and the contents inside. It encompasses a broad series of policies, including homeowner's insurance, flood insurance, earthquake insurance, and renter's insurance.
While homeowner's insurance covers personal property, commercial property insurance protects business assets from unexpected catastrophes. These may include theft, burglary, fire, and flooding. It also helps pay for repairs or replace damaged business equipment and furniture.
Business Owner's Policy
A Business Owner's Policy (BOP) combines business liability and business property insurance into one premium policy. It protects your business against the risk of fire, theft, earthquakes, hail storms, and other covered losses. It can be customized to industry-specific companies, making it perfect for any business, including a startup in Dallas, TX.
The main advantage of a BOP insurance cover is that it simplifies your coverage needs. It offers a way to save money while getting broad coverage for theft, fire, loss of income, and lawsuits. Businesses with specific needs can add to the coverage with things like professional liability and data breaches. You can also combine it with general liability coverage for maximum protection.
Cyber attacks are becoming increasingly common, hence the need for cyber liability insurance coverage. This type of small business insurance protects you against the fallout of hacking threats and cyber attacks. It provides financial protection and prevents business disruption. With most businesses relying on technology to conduct their operations, cyber insurance is necessary for startups in Dallas, TX.
If you have employees, you may be required to get disability insurance. It covers a portion of their salary if an employee cannot work due to an injury or illness. Some states require disability insurance, usually costing 0.25% to 0.5% of payroll. Neither have to be work-related, hence the difference between workers' compensation and disability insurance.
What's the Right Insurance Cover for My Startup?
Your liabilities will increase as your business grows, hence the importance of investing in the right business insurance policies. Consider starting with worker's compensation, general liability cover, and property insurance.
Your choice of business insurance will depend on several factors, including your industry, legal responsibilities, business assets, and overall risk and liability. An insurance agent can help you get the right coverage for your startup. Better yet, they can tailor a policy to your business needs.
Keep in mind that you may need more than one insurance cover. For instance, a tech or IT startup may need cyber risk insurance, general liability insurance, professional liability coverage, and property coverage. Startups in the retail and manufacturing industry may benefit from property insurance, workers' compensation, and product liability insurance.
Looking for Company Insurance? Contact Thumann Agency to Explore Your Options
Finding the right coverage for your startup can be time-consuming, confusing, and costly. However, it's also necessary to handle it before officially opening your doors to customers. Thumann Agency offers access to competitive insurance products, including general liability insurance, business owners' policy, electricians insurance, and more as a family-owned insurance company.