Starting a small business is a big undertaking. The last thing you want is for accidents, lawsuits and other unforeseen events to undermine the hard work you are putting in. That’s why it’s important for startups to consider different types of business insurance that can help safeguard your success.
Your insurance needs will depend on your industry and your occupation, but here are four common policies that may be essential to your small business startup.
1. Professional Liability
There’s a learning curve when it comes to starting a small business. You’ll likely be learning a lot about how to run a successful business, while at the same time working on projects for your clients and customers. With so much going on, mistakes are bound to happen. Hopefully you catch them before they cause problems for your clients, but if not, you may need insurance coverage to back you up.
A Professional Liability insurance policy (also known as Errors and Omissions or E&O insurance) is an essential policy that protects you and your company in case of a lawsuit due to alleged professional wrongdoing. This includes mistakes and omissions in your work, as well as missed deadlines, breach of contract, negligence, and other similar liability incidents.
If a client or customer alleges that your work caused a financial loss for them, they may sue your business for compensation. Professional Liability insurance pays the legal fees associated with these types of lawsuits, including settlements and judgements, so you don’t have to. This can help protect your business finances, which may be limited until business takes off.
2. General Liability
Many startups start out as home-based businesses. This may make your workday feel less formal, almost as if you’re inviting clients over for a social visit rather than a business meeting. Regardless of where you’re working, if a client injures themselves in your workspace, you may need insurance coverage to protect your business.
Also referred to as Commercial General Liability (CGL) or “slip and fall coverage”, this insurance can protect your business against bodily injury or property damage lawsuits from outside parties.
If a client, customer or other member of the public is injured where you work, you may be liable for their medical expenses. General Liability insurance covers the medical bills resulting from the injury. Furthermore, it also protects you if you damage a client’s property by paying the costs of a lawsuit or compensating the client for their loss. This keeps you from needing to dip into your business savings when that money could probably be put to good use elsewhere.
3. Business Owner’s Policy
There’s a lot that can go wrong when you own a small business, regardless of whether you’re just starting out or have been operating for years. Rather than researching the many types of insurance that you may need, it may be easier to buy a single policy that includes coverage for some of the common risks your business might face.
A Business Owner’s Policy (BOP) is a convenient and affordable way for small business owners to protect against several of their most common exposures. These policies combine General Liability insurance with other types of coverage, such as business interruption and business property damage.
Business Owner’s Policies can be customized to suit the needs of your business, industry or occupation. Along with business interruption and business property damage, it might also include coverage for rental vehicles, transporting customer property, and other business risks.
4. Workers’ Compensation
Many startups are one-person operations. With any luck, your small business will quickly grow, and you’ll need to hire staff to help you keep up with demand. This means you’ll need to protect your employees should they become injured or seriously ill on the job and protect your small business finances at the same time.
Workers’ Compensation insurance protects you against medical expenses and lawsuits that can arise from employee workplace injuries and illnesses. It could also pay lost wages as a result of the work injuries that an employee sustains.
If an employee suffers a workplace injury or illness, you could be held liable for their medical costs and replacement wages. Workers’ Compensation insurance will pay these bills, so you are not left out of pocket for these expenses. You’ll also be on the right side of the law, as most states require businesses to have Workers’ Compensation insurance as soon as they hire their first employee.
Find small business insurance with BizInsure
Whether you’re starting a new business or have been working for years, BizInsure can help you find the right insurance for your small business.
You can easily quote Professional Liability insurance or any of our other products in minutes. Compare the policies on offer and buy instantly online or over the phone. We’ll even email your proof of insurance right away.