Business Insurance Guidelines for Start Ups

/ BLOG

Business Insurance Guidelines for Start Ups

May 31, 2017 · 5 minutes to read

As a start up business owner, you know how hectic and exciting the early stages of building a new company can be. With all of the other time consuming tasks on your plate, you may not have factored in securing insurance.  Many emerging entrepreneurs are uncertain about what kind of protection is suitable for their particular business or even about if and when they need it at all.

The fact is that there is more litigation directed against private companies now than ever before.  Having insurance will help you better cope with the possible road bumps ahead. If your product harms someone (e.g. E&O/Product Liability), or if your product damages someone’s property (Commercial Package: Property), and even in the unfortunate event of bankruptcy, you can set up the right insurance to respond (e.g. Directors & Officers Liability Insurance). With the appropriate coverage in place early on, you will benefit from added security, lower premiums and an additional forward-thinking measure to help you successfully move beyond the start-up phase.  Navigating through the elaborate world of insurance can be a daunting task for both the emerging entrepreneur and the seasoned business owner; I’d like to help get you started.

The Start-Up Phase
During the start-up phase you’re quite busy to say the least. It is common for companies to purchase their first insurance due to mandatory stipulations in a lease or contract however, there are other types of protection that could impact your business. Consider these types of insurance coverage as your company enters its first major phase of development:

  1. Workers’ Compensation: Have you hired employees?
  2. Commercial Package Policy: Are you leasing space or equipment?
  3. Umbrella Liability: Do you need higher limits?
  4. Professional Liability: Do you provide service for a fee?
  5. Employee Benefits: Do you want to attract and retain employees?
  6. Management Liability: Do you have investors?

1.      Workers’ Compensation
Worker’s Compensation is mandatory once you hire your first employee.

    • Cost Estimate: Cost is based upon on total payroll and job duties of your employees, but typically isn’t more than $3,000 if you have under 5 employees.
    • Covers: Medical costs and income replacement for employees injured while on the job. Employer’s Liability: Defense of a company against suits brought by employee(s) for a company’s negligence, i.e. unsafe working conditions.

2.      Commercial Package Policy
This is the core of your risk management program and will satisfy a handful of requirements by a landlord (for your new lease), your customer who requires evidence of liability, and anyone leasing you equipment.  Contains two or more lines of coverage usually property and general liability (and sometimes auto and umbrella).

    • Cost Estimate: For small companies, cost is often less than $2,500.
    • Covers: Property, Business Interruption/Extra Expenses (can be modified to cover continuing expenses, and milestone payments), Employee Theft, General Liability, Products Liability, Basic Automobile Liability and Employee Benefits Liability.

3.      Umbrella Liability
Your landlord may require limits higher than what is provided through your general liability policy and this is a simple way to add limits to the existing coverage.

    • Cost Estimate: For small companies, cost is often about $1,000 per $1M of Umbrella limit.
    • Covers: Umbrella Liability expands the limits of the Commercial Package Policy: Auto, General Liability, Employee Benefits Liability, and Employers Liability.

4.      Professional Liability (a.k.a. Errors and Omissions/E&O)
If you provide service(s) to others for a fee then you likely have professional liability exposure.  Additionally, lawsuits can be brought against you even if you didn’t do anything wrong.  Generally companies consider this as a reaction to a contractual requirement.

    • Cost Estimate: Type of coverage varies greatly based on your occupation but costs can be less than $2,000.
    • Covers: Protect your business from customer lawsuits related to “negligence” or “failure to perform.”  Defense and litigation costs related to errors, omissions or negligent acts from your service or products that cause financial loss to your client. Allegations may include: Error, omission, or negligence in providing a service; Failure to provide a service, Violation of good faith, Overpromising, Improper documentation, Malpractice, Mismanagement, Misrepresentation of facts, Nondisclosure, and/or Violations of state and federal law.

5.      Employee Benefits
The more robust your offering the more attractive your company will be to existing and potential employees.

    • Cost Estimate: Cost depends on the specific offering you develop.
    • Covers: Basic employee benefits such as medical, life, vision and dental.  Employers with 10+ employees can also consider disability and 401k

6.      Management Liability
This is often required by investors to protect your business and personal assets as an officer or director of the company from fiduciary/monetary allegations by outside investors, suppliers or other counterparties.

    • Cost Estimate: Costs begin around $2,500 to $15,000 based on level of coverage.
    • Covers: Directors & Officers Liability/D&O, Employment Practices Liability/EPL (Discrimination, Harassment, etc), Fiduciary Liability (401K plan lawsuits).

I know that in the exciting early stages of building a new business there are already a lot of things to think about. While you’re finding investors, developing your product, and designing a web site, consider this friendly reminder to procure business insurance early. If things get bad, having the right insurance can protect all your hard work. Having foresight will help avoid, or better cope with, some of the obstacles that can get in the way of your success.

BizInsure Guest Blogger: Scott Eberhard

Talk to us

Today’s BizInsure offerings are just the beginning. Please take the time to tell us what you think, offer advice, ask questions, give compliments, or make a request…customer feedback defines us. We’re listening.  Click here to contact us.

Compare quotes in minutes with no obligation to buy

Get Quotes

Compare quotes in minutes with no obligation to buy

More than 6,000 customers covered by top-rated insurers.

Get instant quotes
Noa made sure I had all the information I needed for a first time business owner . He helped me understand what I needed to secure a quality policy and he was super helpful when explaining how the policy would serve its purpose to my company. I was very satisfied and had an Awesome experience, I think people like that make the company look good!
Wayleen Ortiz
Wayleen Ortiz
04:36 15 Oct 21
Julia Georges-Louis
Julia Georges-Louis
22:28 29 Sep 21
I was in need of WC, GL and PL coverages for my business and was able to shop, discuss, confirm and purchase all the coverages in two days! This was a great experience, especially when "Time is Money". Noah Bowman was very professional and knowledgeable. Thanks!
AmeriCreed 1776
AmeriCreed 1776
15:42 23 Sep 21
MOVING FORWARD, I WILL BE SENDING ALL OF MY BUSINESS TO THIS COMPANY !!!! Incredible customer service!!! Thanks
THEODORE WELLS
THEODORE WELLS
19:49 09 Sep 21
Daniel Patrick Sullivan
Daniel Patrick Sullivan
16:49 07 Sep 21
Their representative clearly explained different kinds of policies to help me select the one appropriate for my needs and then helped me enroll by phone painlessly. By the end of the call, I had a policy in place.
Dissent Doe
Dissent Doe
22:21 02 Sep 21
Sheree Williams
Sheree Williams
19:39 27 Jul 21
Eugene was Awesome!!!!
Lakesha G
Lakesha G
17:19 21 Jul 21
Excellent solution for writers and authors professional liability policy as well as coverage for copyright and trademark infringement. Service was prompt and excellent.
Lane
Lane
18:22 22 Jun 21
Jugrid Ombisi
Jugrid Ombisi
16:26 15 Jun 21
Done in less than an hour!
William Opperman
William Opperman
00:30 02 Jun 21
Efficient, and great value. The agent was able to give us a quote and a new policy in a short period of time. Thank you
Brenda Jones
Brenda Jones
20:30 24 May 21
I had a great experiencing obtaining several of my insurance needs as a landscaping company here in Northern Colorado. BizInsure's team took care of my needs and was very responsive to help with paperwork needed to secure a potential client account!
Arik Solberg
Arik Solberg
16:34 10 May 21
Adj Ako
Adj Ako
16:47 05 May 21
Very efficient they were able to help me out with my request promptly....highly recommend this companyI am very happy to have them
Elba Perez
Elba Perez
18:50 26 Apr 21
I need a help getting errors and omissions insurance along with general liability. Jose was very friendly informative and was very patient with me during the process. He found me some of the best rates for the coverage that I needed. Highly recommend
Casper Martinez
Casper Martinez
19:51 20 Apr 21
I had numerous conversations with several business insurance agents over a month's time. I also had several conversations confirming the policy inclusion/exclusions and asked many questions. My BizInsure agent was professional, knowledgeable and most important—detail oriented. Even after having an initial conversation a month earlier he knew and *remembered* all my personal/professional insurance needs. When I asked for additional information on the third call he was able to provide me with details very quickly. He was also VERY patient. That is a big plus in my opinion. It illustrated a high level of respect for my needs. I also found when I called back and asked to talk with the initial agent, the person who answered the call was able to get in contact quickly and my agent responded and returned the call within 5-10 minutes. The transaction was smooth, and I think it's a good sign should I ever need to make a claim. I highly recommend BizInsure.
Poetic Films
Poetic Films
21:00 07 Apr 21
Sandra Darjean-Murphy
Sandra Darjean-Murphy
17:48 31 Mar 21
Jusephine Ghong
Jusephine Ghong
17:58 23 Mar 21
The rep was extremely helpful actually lowered my quote and made sure I was covered to fit my needs with my growing business! 5star!!
Franklin Behm
Franklin Behm
19:04 16 Mar 21
Excellent service and prices.
Cassiopée V Lapierre
Cassiopée V Lapierre
23:13 09 Mar 21
S & S Professional care llc Home Health Agengy
S & S Professional care llc Home Health Agengy
04:15 24 Feb 21
Mr. Daniel Scott was very responsive to my professional needs.
Stephanie Woodruff
Stephanie Woodruff
17:38 18 Feb 21
Eugene deserves a raise! First time purchasing insurance and he made the process so simple for me. His patience and attention to detail left me feeling confident in my decision to choose BizInsure. Gracias Eugene!
Esined Perez
Esined Perez
23:32 17 Feb 21
DIVINE FIJIANS HOME CARE SERVICES
DIVINE FIJIANS HOME CARE SERVICES
22:49 05 Jan 21
The customer service provided by Jose was outstanding. He explained everything in a very clear/logical way and answered all of my questions. After providing all the information to obtain general liability insurance, Jose sent me the declaration page of the insurance for review. All of the information matched what I provided over the phone and there were no typos. The next day I called back to purchase the insurance which was easy and fast. Overall, my experience with BizInsure including the customer service by Jose exceeded my expectations.
Joe Wajdula
Joe Wajdula
03:29 12 Dec 20
Hiscox/BizInsure made getting Liability Insurance very easy and reasonable.I expected it to be a long and complicated process and it was a nice surprise that they made it so uncomplicated. Thank you. Lisa
Lisa Word
Lisa Word
21:51 24 Nov 20
Eugene was incredible. I called 4 other brokers before him who were impossible to get any help.
rhonda hale
rhonda hale
23:26 12 Nov 20
Owner (LPN)
Owner (LPN)
23:19 06 Nov 20
Cincere Browdy
Cincere Browdy
15:16 29 Oct 20
Very quick to get in touch with you and good with follow up. Had some trouble retrieving my quote to log into my account initially but Daniel assisted me and the changes were made to get me into my account. Great value for the money.
Fran Sutton
Fran Sutton
16:34 20 Sep 20
Very happy to be insured with this company. Professional, Timely, very helpful. Thank you Juan, you made it so much easier for me to understand.
Aileen Day
Aileen Day
19:55 15 Sep 20
This company responded when I needed them to respond while facing a deadline. They are an excellent choice for business Insurance.
Michele Harris
Michele Harris
01:52 12 Sep 20
Jose Quintero took such great care of me and was very patient explained everything I did not understand and got me set up quickly. Fabulous customer service
Christina Rose
Christina Rose
02:41 27 Aug 20
I can't say enough good things about Daniel Santos kind and effective communication skills as an insurance agent. Daniel was so pleasant, friendly and efficient with helping me obtain insurance as a teacher. If I were to give Daniel a grade, he has earned an At . He made the process easy to understand, it was far easier than what I anticipated. Nancy S.
Nancy Sloan
Nancy Sloan
00:47 26 Aug 20
I was in need of professional liability insurance for my sole proprietorship. A friend referred me. Everythng was quick and simple and AFFORDABLE!
hope jones
hope jones
20:31 25 Aug 20
If you need Private Home Care Provider insurance for your company, BizInsure, LLC can get it for you!
Pamela Curry
Pamela Curry
16:45 24 Aug 20
Cameron Peek
Cameron Peek
19:25 24 Jul 20
Great and fast service!!!! The representative was very professional!!!!
Tanya Sweet
Tanya Sweet
19:51 14 Jul 20
I was tryi9ng to find commercial liability insurance for my new comp-any and BizInsure was easy to use and very affordable which is great for me as a new business.
Jimmy Smith
Jimmy Smith
19:01 14 Jul 20
Great service, but they're also extremely patient. I called over a month ago for specialized E & O coverage, and Bizinsure was able to put me in touch with an extremely reasonable quote. Absolutely invaluable time and monetary savings to be had by going through these folks. If you can-- ask for Anthony. Absolute gem of a human.
James Lang
James Lang
18:19 02 Jul 20
Ken M
Ken M
23:21 28 Jun 20
Great service insurance prices are great for professionals looking to get insurance for businesses....
Rhonda Gray
Rhonda Gray
22:34 22 Jun 20
The provided very professional service and made the process easy.
Paul Rising
Paul Rising
21:51 04 Jun 20
Bradley Hoyle from the Biz Insure team was excellent to work with. Everything was quick and smooth. Great service, much appreciated!
Kristene Smith
Kristene Smith
02:03 04 Jun 20
Anthony Spencer was great!! Very quick response time!! He was very Professional! I would suggest him because he helped me find a affordable rate and explained all the technicalities..
Fre Hall
Fre Hall
16:38 28 May 20
I was referred to Bizinsure by a industry trade group that I am a member of. It was easy to get a quote online and then received excellent customer service from Bradley H. to complete my policy purchase over the phone. I have shared this company information now with other business owners for their policy needs.
Dawn Torres-Gale
Dawn Torres-Gale
22:11 08 May 20
This company was very precise with explaining services and made sure I chose the right business insurance coverage, great customer service at purchasing.
Nekeisha B.
Nekeisha B.
01:30 05 May 20
Amazing
Jasmine Q
Jasmine Q
14:31 02 Dec 19
Trish is the most patient, professional and understanding insurance agent I’ve ever worked with. Trish has taken care of all my business insurance needs for the last couple years. I am really happy that I found an insurance agent that I know will take care of me & all of my concerns. I feel like a valued customer & I appreciate the great customer service that I get every time!!THANK YOU!
Dr. Youssef C. Atallah
Dr. Youssef C. Atallah
17:21 14 Nov 18
Tricia helped me get insurance for my business. The task of obtaining a quote was really starting to frustrate me until I was referred to BizInsure through a different agency. Tricia got me a quote fast, and even took a down payment over the phone and issued the proof of insurance the same day. a+ service, would do it again in a heartbeat!! Thank you!!
Josh Mariscal
Josh Mariscal
18:07 22 Jun 18
BizInsure was a great find! I did not have to fill out applications, and Tricia was able to quote and bind business insurance for me within half an hour.
Allison Young
Allison Young
17:28 21 Jun 18
Started doing business again and needed a policy fast. Ramez was reasonable, helpful and the rates are OK. Buyer beware? Sure, for me it turned out OK this time. Worth a call.
Mark Wallace
Mark Wallace
23:42 13 Nov 17
Daniel Scott
Daniel Scott
15:15 27 Jun 17
Great customer service. I've been very inpressed with my dedicated representative that had helped me navegate my insurence needs. Thanks so much!
Graham Blair
Graham Blair
22:12 23 Jun 17
js_loader

Popular Searches