The to-do list for an aspiring entrepreneur is endless when running a startup business. As such, it is no surprise that significant aspects of their endeavor often get overlooked. One of the most important things of all is evaluating what type (or types) of insurance your startup business might need to keep your assets protected.
The kind of insurance you need will depend greatly on the type of business you run. Here are some of the common considerations when evaluating which insurance your startup should have in place.
General Liability Insurance
This form of insurance takes a broad approach, covering you for injury and damages caused by your products or services. You may be an individual who takes extra precautions surrounding safety while conducting your work. However, it is not uncommon to get sued for something that is loosely tied to your business even when the incident occurred due to misuse by the consumer. In this case, it is better to be safe than sorry.
Professional Indemnity Insurance
According to Henry Seymour & Co, Professional Indemnity Insurance UK based experts, this form of insurance is an essential cover for large and small businesses alike. Professional Indemnity covers things like claims of libel and slander, inadvertently sharing confidential information, theft of intellectual property, and more. This form of insurance is especially important when working with partners.
Automobile insurance is crucial if you have a work vehicle or use your personal vehicle to do work-related tasks. If you use both, then you will require both commercial and personal automobile insurance. A work vehicle could be anything from a car used to take clients around to a fleet of shipping trucks. In many parts of the world, it is illegal to be on the road without proper insurance in place.
Worker’s Compensation is essential if you have employees. This form of insurance covers your employees’ medical bills and time away from work should they be injured on the job. In most cases, accepting assistance from Worker’s Compensation requires a contractual agreement from the employee, guaranteeing they won’t sue their employer. However, Worker’s Compensation may still choose to investigate the incident if they feel there are signs of neglect of unsafe working conditions.
This form of insurance speaks to the challenges of running a business in the modern age. Even the most secure organizations sometimes fall victim to skilled hackers looking to steal and exploit important information. Data Breach insurance covers you if this transpires. If private information is taken–such as your employees’ banking information– this coverage will protect you from the implications in the loss.
If you conduct your business from home, it is important to have homeowners or renters insurance. The difference, of course, comes down to whether you own or rent your home. This will cover damages to your home that could impede your personal and work life, and will also cover the contents of your home. So, if you have expensive equipment with which you do your work in your home office, you’ll want to be sure that it will be replaced in case of a fire.
Professional Liability Insurance
This insurance is used to cover your business if you fail to render services promised or render them improperly. This is separate from general liability insurance as it covers more issues specific to your professional existence. For example, if you are a contractor who fails to give a client what they want based on your agreement, professional liability will cover you, while general will not. It is important to know the difference between the two so that you have adequate coverage.
Do I Need All of These?
In most cases, a startup business will not need all of these types of insurance initially. If you are the only person in your organization, you do not need Workers Compensation. If you aren’t storing any sensitive information, then having data breach doesn’t make sense. If you think any of these types of insurance will be relevant (general liability insurance is a must-have regardless) then do your due diligence to make sure you have the coverage you need. You’ll be grateful to have coverage should anything unwanted ever arise.