business startup requires more than you can imagine. The initial investment involves costs beyond the usual operational expense—and they are essential for running the business safely and smoothly, with a legitimate chance to flourish. One of your first expenses is your business insurance.
The right policy coverage is a must-have for any business, big and small. It is an assurance that you will safely operate the enterprise, which, in turn, attracts business partnerships and investments. It also helps keep great talents grounded in your company. With suitable insurance coverage, your employees will feel confident seeing the business through great success.
What’s the need for business insurance?
Like the primary objective of insurance in general, business insurance aims at minimizing your company’s losses that may arise from future uncertainties and specific risks. Each business has a different set of potential risks to deal with. That’s why policy coverages vary widely across industries, including their costs. For example, a fitness hub may have more expensive premiums compared to a party rental business.
The actual costs of business insurance for startups
But the potential risks the business may be exposed to are not the only considerations that determine your company’s insurance costs. State requirements and the size of the business you are starting up also matter. There are different types of business insurance policies attached with different price tags. The various policies are combined to provide sufficient coverage for the specific enterprise you are involved in. You may pay more or less, depending on your business type and how much coverage you want for it.
- General liability insurance is the basic coverage every business needs to open and operate safely. It generally protects the business from liabilities if someone gets injured within the premises. It also usually covers property damage, slander, and libel. For a handyman business insurance cost, you may spend from $360 to $1,000.
- Commercial property insurance is a more detailed coverage for the company’s assets and properties, including equipment, tools, furniture, and inventory.
- Professional liability insurance is also sometimes called product liability. It helps pay for legal fees if customers sue you for getting injured using your product. This covers any damage caused by an error in the products or services that you sell.
- Business interruption insurance is coverage for any lost profits. The amount of benefit gained from this insurance is measured according to the company’s income levels for a certain period.
- Worker’s compensation insurance is a requirement for most states. It helps pay for your employees’ medical care, disabilities, lost wages, and funeral expenses if they suffer from a work-related incident.
- Commercial auto insurance covers expenses incurred when you or any of your employees are at fault in an accident involving the company vehicle. However, this insurance cannot be used if you or your employees are involved in an accident driving your car, even if it occurs during office hours.
- Business travel insurance is additional coverage you can use if your business involves frequent travel. It offers significant protection if you or any of your employees suffer from trip cancellation, baggage loss, or any injury during a business trip.
Business insurance is a large umbrella of different coverages that different types of businesses may require. Before you sign up for a policy and pay for it, make sure that it is relevant to what you do.