4 Types Of Insurance Every Startup Business Needs
While startups may prefer to focus on the flashier aspects of business such as marketing and product development, there are several pragmatic concerns that every small business needs to address. One of the most important of these is insurance, without which a fledgling startup may suddenly fail before it ever finds success. Take a look below to learn more about four types of insurance policies that every startup should seriously consider before they officially launch.
Workers' Compensation Insurance
In many states, there is no way to opt out of workers' compensation insurance. If you have even a single employee, you will need to purchase a policy that covers them in the event that they are injured on the job. Waiting to get workers' compensation insurance for too long in a state that requires it can make you subject to hefty fines and other penalties which can hinder the growth of your business.
General Liability Insurance
When most people think of "business insurance," they are likely thinking about general liability insurance. This kind of policy protects a business in the event that a customer or other individual claims they were injured as the result of something that happened on your business's property. If they accuse you of negligence (and prove it in court), then—without any insurance plan—your business would be forced to pay for the customer's medical expenses out of its own profits.
Commercial Property Insurance
If your business is located at a physical site, then there is no question that you should have a commercial property insurance policy as soon as you move in. This is because commercial property insurance pays for any loss or damage caused by events as varied as a fire, robbery, or storm. Keep in mind that depending on where you live, you may also want to purchase additional flood insurance, as many commercial property insurance policies do not include it.
Sometimes referred to as professional liability insurance, these policies protect you against legal costs that arise in the aftermath of an error your business has made. If, for instance, an employee makes a mistake that causes a client to lose thousands of dollars (which is all too common in fields such as accounting and information technology), they can easily take legal action. Even large businesses can easily collapse because of a single mistake that was not insured against, so it is worthwhile for all startups to purchase a policy.
Contact a local insurance service to learn more about business insurance for startups.