Business Insurance for Startups: Essential Protection for New Companies

As a new business operator, you are undoubtedly enthusiastic about launching your own company. But what occurs if things don't proceed as planned? You need to shield yourself and your family from the financial consequences that can occur when accidents or disasters happen.

One of the ways you can accomplish this is by buying insurance for your business—an investment that will pay dividends many times over. In this article, we will examine some of the insurance types that startups might want to evaluate purchasing, why it's crucial, and how much it might cost.

Who Needs Startup Insurance?

When you're launching a new business, you require startup coverage. It's that straightforward! When you are starting a small company, you might not have the capital necessary to protect your small business without going into debt. Plus, startup coverage protects the company you're working so hard to establish.

Why Startups Need Insurance

The startup process is filled with uncertainties. You might not know what's going to occur with your business, but you'll require coverage to shield yourself and the company that you have invested so much time and effort into building. The right insurance policy will help pay for:

• Being sued for an employee injury

• The expense of repairing damaged property

• Injuries that might occur in your business

• Any errors or mistakes you make

• Credit monitoring for clients in the case of a cyberattack

Insurance carriers provide a wide variety of policies to help protect small businesses from the risks they encounter.

Types of Business Insurance You May Need

There are several different business insurance policy types that we suggest for new startups to help get you started.

General Liability Insurance for Startups

General liability coverage is basic protection that a startup will require—It's also one of the most comprehensive business insurance options. General liability coverage protects your potential legal responsibility for damages to third-party property or bodily injury to another person, including those caused by an employee acting within the scope of their employment with you. This means they'll pay medical bills when someone is injured, and cover the expense to repair or replace their damaged items.

General liability also protects against advertising injury, which is an injury to someone's reputation that you cause through lies or misstatements you're accused of making in an advertisement. This encompasses slander, libel, or copyright infringement (copying someone's intellectual property).

This policy can also include specific protection for product liability. When someone you sell injures a customer, you can be held responsible for that injury.

When you have a general liability policy, your insurance carrier will typically help pay legal costs when you're sued (the expense of legal counsel, defense expenses, legal fees, and settlements.)

Commercial Property Insurance

Commercial property coverage—sometimes called business property insurance—is typically designed to shield the buildings, fixtures, and equipment necessary for your business (think inventory, furniture, and personal property as well). You'll find that most commercial policies protect property damage from perils such as fires, storms, burglary and theft. Almost every property insurance policy will exclude flooding, so when you live in a flood zone, you might need to get an endorsement or a separate flood insurance policy.

Business Owners' Policy

A business owners' policy (BOP) is an insurance type that bundles together a variety of protections. Those protections typically include general liability coverage, property coverage, and business interruption coverage. How does this benefit you? A BOP is frequently a more affordable way to buy the protection you require and is often cheaper than buying each policy separately.

Business Interruption Insurance

A business interruption policy will help pay for your company when your place of business is damaged and you cannot operate. The policy is designed to pay some of your operating expenses while you rebuild. This can include paying employee payroll, taxes, debt repayment, your lease, and even a portion of your lost revenue.

Commercial Auto Insurance

Commercial auto coverage typically protects against accidents that occur when your car is being used to conduct business (delivering items or picking up supplies, etc.). It is typically required when your business owns the vehicles or they're being used for business purposes.

Professional Liability Insurance

Professional liability coverage—sometimes called errors and omissions insurance—protects you as an individual for any legal claims that arise from your professional actions. It can include protection for negligence,