Working on a new start-up? Taking meetings? Working on funding? Building your business and marketing plans? As a start-up, there’s a lot going on and a lot you need to think about including how you’ll protect your business.
Have you thought about business insurance yet? If not, here’s what you need to know.
Why Your Start-Up Needs Business Insurance
Before you tell yourself your start-up is too new to need insurance or you’ll get it later when you’re more established, stop. There are very serious reasons to make sure you have business insurance now. If you don’t get it, your start-up may never actually get started.
Insurance Provides Financial Protection
Think of insurance as a safety net. Start-ups aren’t always flush with cash, and when you do have funds, it’s earmarked for other uses: product development, marketing, purchasing equipment and inventory, and more. Without business insurance, you’ll have to pay out of pocket for any hazards and perils. One lawsuit or fire that destroys everything could kill your business before you get started.
Insurance Helps Build Your Business
Carrying a business insurance policy can help your business grow in two ways:
- Clients, vendors, and government entities may require proof of insurance before they’ll work with you.
- Insurance may be required when you lease office space or take out a loan to buy commercial property.
You don’t want to lose out on a source of income or the prime spot to start your business because you don’t have business insurance. In this case, purchasing a policy can actually help your start-up get off the ground and move forward.
Insurance May Be Legally Required
While your start-up only has you, you may not have any legal obligation to carry insurance. But the moment you hire your first employee, you’re required to purchase workers compensation coverage. Workers compensation protects you as much as your employees by paying for lost wages and medical bills if they’re injured or become ill on the job. It also covers you in case an employee or their surviving family decide to sue you.
Types of Business Insurance to Purchase
Every business needs a unique blend of insurance coverage to protect the company. Your needs as a start-up may be different than what you need in a few years. Work with an independent insurance agent to find the best coverage for your start-up. There are multiple types of coverage to choose from:
- General liability protects your business when a third-party (customer, vendor, etc) is injured or suffers property damage while doing business with you.
- Commercial property insurance helps you replace and repair your property if it’s lost or damaged in a covered peril.
- Commercial auto insurance protects your company when you or an employee are involved in an auto accident while driving for business-related reasons.
- Workers compensation is required once you hire an employee but it’s also a good way to protect your employees and your business after injury or illness.
- Cyber liability coverage protects your business if you’re hacked and data you’ve collected on customers, vendors, clients, or patients is compromised.
- Errors and omissions (E&O) is a form of liability coverage that protects you when professional mistakes or errors cause customers or clients money and they hold you responsible for the damage.
- Umbrella insurance is an added layer of liability coverage for lawsuits and settlements that exceed your other liability insurance policy limits. Instead of paying the difference out of pocket, umbrella coverage helps pay the rest.
No matter what kind of start-up business you have or where you are in the process of building your business, you need insurance. Contact Charlotte Insurance and let us help you protect this investment in your future.