What Your Startup Needs to Know About Insurance
Launching your startup is a dream many people spend years considering. It takes work to find what you’re passionate about and decide if you can find and build a receptive audience. There’s market research to conduct and branding to take care of, all to get your business on its feet.
Before you open your doors for business, there are a few other steps you’ll need to take. While you’re writing your business plan and working out your marketing strategies, you’ll want to think about insurance. There are many different plans you can opt into so you gain protection for every aspect of your business. But where do you start?
Read on to learn what your startup needs to know about insurance. Learning about different plans and whether they apply to your business will help you figure out what steps will help your startup achieve success.
Get Property Insurance
Many startups begin at home, but you may be one of the lucky people who buy a physical location for your business. It’s always a good idea to have a place where your customers can visit, browse through products and meet you in person. While you’re looking through listed properties for your dream location, think about property insurance.
Depending on whether you rent your building or take out a loan, it may be a requirement to get property insurance as well. This kind of insurance covers your losses during two types of events. If someone steals your products or damages your building, you’ll get money back. You’re also protected against natural disasters like hurricanes or earthquakes — although if you want flood insurance, that’ll require an additional plan.
Check Out Workers’ Compensation Insurance
Before you decide to hire your first employee, you should check out Workers’ Compensation insurance. It’s a policy that covers you if your employees get hurt on the job. It will pay for the wages they lose if they need to take time off to heal, as well as any bills you need to pay for medical treatment.
Sometimes small business owners feel like they need to hire a certain number of employees before getting insurance like this. But you don’t want to wait. In the United States, 89.6% of companies operate with fewer than 20 employees, so smaller businesses are more common than you might think. Protect yourself from the beginning with Workers’ Compensation insurance so everyone can go to work with peace of mind.
Consider a Professional Liability Policy
During your many hours of business-related research, you may have read about professional liability policies. Sometimes also called Errors and Omissions insurance, this kind of policy protects your business from any claims that you’ve failed to follow through on customer expectations. If your business doesn’t perform as expected and a customer wants to file a negligence claim, you won’t need to go bankrupt to save yourself.
An important thing to know about this insurance is to look for a policy that covers your niche. It must be specific to your services, so don’t get insurance that doesn’t relate to what you do.
Obtain Product Liability Insurance
You may want to run a business where you make or sell products that change people’s lives. Whenever you start selling things, you’ll need product liability insurance. Even though you’d never sell anything that isn’t safe or easy to use, people may still file lawsuits if they misuse the products or break them.
Product liability insurance backs you up in case someone sues over defective products. It allows you to choose how much insurance you carry for each product, so you pay less for items that don’t sell as well as others or don’t have as pronounced a risk.
Do Your Research
There are many different kinds of insurance for small businesses to consider, so take your time and do your research. Figure out what kind of services you’ll offer, whether you’ll sell products and when you’ll hire employees. Once you have those answers, it’ll be easier to decide which insurance plans are right for you.