When launching a startup, there’s always exposure to risk, regardless of what sector you are in. Even before hiring your first employee, your company can be held liable unless you have the correct insurance plan in place. Startups need protection more than most. Should you be faced with a lawsuit, this catastrophic event could see your business never getting off the ground. To protect you from potential dangers, here are some of the different kinds of business insurance that your startup should have in place.
E and O Insurance
E and O insurance (errors and omissions insurance) is required to protect your startup from negligence claims. These can arise because of mistakes or failure to perform. Each industry has its own insurance concerns. Your E and O insurance policy will most likely be customized to be specific to your sector, so it’s your responsibility to read the fine print of your policy, which will establish what you are and aren’t protected from.
Property Insurance
If you plan to operate a land-based business, you must take out property insurance. Property insurance will cover your business premises, any company-owned equipment, as well as furniture and inventory. Should any of these areas become damaged because of a fire or natural disaster, having property insurance in place will cover you. If your property insurance policy does not cover events like an earthquake or flooding and the area you’re in is prone to these destructive events, you may wish to ask your insurance agent about how your startup can be used.
Workers Compensation Insurance
From the moment you hire your first employee to your startup, you will want to get insured for workers’ compensation. This type of insurance covers your company for medical treatments, as well as death and disability benefits, in the event one of your staff suffers a personal injury or dies as a result of working for your company. No matter what safety guidelines you have in place, accidents can and do occur, so it’s vital you’re covered for any situation.
Product Liability Insurance
If you plan to manufacture products to sell to the general public, taking out product liability insurance is essential. Even if you’re thorough in the design and production stages and follow every precaution, there is still the risk of being faced with a lawsuit from customers because of your products.
Vehicle Insurance
If you or a member of the team use a vehicle for business purposes, it’s wise to add vehicle insurance to your list of insurance policies. Vehicle insurance protects your startup against liability should an accident occur, and you or an employee are found to be the cause of it. Some basic vehicle insurance plans may only provide cover against third-party injuries. You can obtain a more advanced policy that covers injuries and liability for damages.
The types of business insurance above will protect your startup and get things off to a good start. Bear in mind that each insurance agency has its own rules and regulations, so make sure to double-check with your agent to ensure your startup is fully protected.