The 5 Types of Business Insurance
Your Startup Definitely Needss
By Donna James
So, you’ve revised your business plan countless times until it passes muster. You’ve got emotional buy-in from friends and family and, perhaps, financial buy-in from investors. Your dream is finally getting off the ground.But, before you fully operationalize your business startup, you need to be aware that “risk” in any business venture is not just limited to revenue and profits. There are other financial risks you will face and that you really should take steps to mitigate. Just as homeowner’s insurance and car insurance protect your personal assets from potential financial damages, there are other insurance products that will help protect your startup from unforeseen losses. An uninsured or under-insured business can be brought down by potentially ruinous legal or medical boils stemming from accidents, crimes, or even simple mistakes.Let’s take a look at how you should protect your new business.
Here’s What You Need:
Liability Insurance. Hey, things can go wrong in any place of business.Sometimes offices get damaged and people can get suffer accidents.Combined with Property Insurance, a good liability policy is must-have for any business.In addition to providing financial protection against potential legal fees and medical bills relating to a workplace accident, many liability policies can also help protect against possible libel and slander issues.You don’t want to be exposed to that kind of risk.Seek out a good insurance broker such as www.americaninsurance.com and explore how to protect your new business with the right level of liability coverage.
Errors & Omissions Insurance – Doubtless, you’ve tried to cover every angle in your business plan, but even the best run companies sometimes screw up.If your business makes a mistake that can’t be rectified with a simple replacement, or do-over of the work, you may be vulnerable to a lawsuit.Errors & Omissions insurance (better known as E&O) can cover you against claims arising from a faulty or unsatisfactory rendering of goods and/or services.As with most types of insurance, the hope is that you never have to use E&O insurance.But no startup should go without it.Wikipedia does a good job of walking you through the details of E&O insurance.
Directors & Officers Insurance – Also known as D&O insurance, this type of policy protects executives and Board members at a company from potential lawsuits arising from any claims resulting from alleged mismanagement.Remember, even the best executives can sometimes make mistakes.And don’t think this type of coverage is only for big companies.Small family-owned business should also seriously consider getting D&O protection since mounting any kind of serious legal battle can get financially draining very quickly.
Data Breach or Cyber Insurance – It seems like hardly a week goes by without seeing a news story about a big company being a victim of a cyber-crime or an accidental data breach. The National Technology Security Coalition reports that 2018 cyber crime losses exceeded $1 trillion. If your startup does any work at all online, you should seriously consider getting Cyber insurance.More and more commerce every year is being conducted electronically and can be vulnerable to both human error and human crime. Your policy should not only cover any confidential information about your business and your customers, but it should cover all aspects of credit card or wire payments.Again, consult your broker to determine the right level of coverage.
Workers Compensation – If you plan on hiring staff for your startup, most states will require you to carry Workers Compensation insurance.In the event any of your employees are hurt while on the job, Workers Comp will provide for missed wages, help with medical bills and, God forbid, death benefits.While it may seem far-fetched that any of your staff can get hurt on the job, a simple slip on a slippery floor can throw out a back or break a bone.Consult your local state mandates for details of Workers Comp in your locale.But make sure your startup has a policy in place when your first employee shows up for work!
The Back Page:
No entrepreneur wants to see their startup get derailed by unanticipated legal bills, repair bills or medical expenses.Without business insurance, it’s hard to imagine that many new ventures could stay afloat for very long.Accidents happen, as they say, but the cliché doesn’t give a full sense of the financial exposure you’ll face if and when they happen to you. There are other types of insurance protections available to businesses beyond the five mentioned here. Don’t let your startup be needlessly exposed to chance – get the right policies at the level of coverage. And consider letting us walk you through the details at www.americaninsurance.com.