As a startup, you’re tight on cash. Actually, that’s probably an understatement, right? You work your butt off trying to raise funding, so why should you bother pouring over insurance proposals? One of the biggest mistakes that fledging companies make is thinking that they don’t need insurance. Insurance is a financial tool for transferring risk away from the business and onto an insurance company. What risks does a startup face? You might better ask which risks they don’t face.
This is the most broad, basic, type of business insurance you can buy. It covers your company against bodily injury and property damage to third parties. It’s especially important if clients will be stepping foot onto the property. Most building landlords require this type of insurance with limits of $1 million per occurrence. You might also be required to carry an umbrella policy.
Auto liability insurance is important when you have a company vehicle. You don’t own a company vehicle? You still might need the cover. Why? Because let’s say you’re on your way to a client’s home or place of business. You get into an accident. Did you know your business could be sued, even if you’re using your personal vehicle? It can. So, if you don’t have a company car, you’ll need “Hired and Non-Owned Auto Liability.
Property insurance protects your business property. It might also be requested by your landlord to cover any improvements to betterments you make to the office or building. Don’t forget to add on computer and media coverage. It’s not something everyone adds or even thinks of, but things like iPhones, laptops, and even the data on the hard drive are all part and parcel of most businesses these days. Losing that stuff could be catastrophic.
What could possibly happen to your startup? Business interruption insurance is one of the best policies you could buy as a small company. Why? Because it protects you if you’re temporarily put out of business due to a robbery, fire, or some other catastrophic event. The income will keep coming in so you can get back on your feet instead of closing up shop permanently.
Companies like www.Kanetix.ca can help you with this – it’s virtually required if you’re in business. When you hire on employees, those employees must be covered by worker’s compensation. It protects the employee if he or she ever gets injured or sick on the job.
The coverage pays a monetary benefit for as long as the employee is unable to work. Why doesn’t the employee just pay for the coverage himself? He can’t. This is something that must be paid by the employer. It’s part of the “hidden” benefits package that every employer must take on.
Is it a burden? It sure can be. Worker’s compensation is sometimes abused by employees. That’s why you absolutely must speak with both a lawyer and a good insurance agent about coverage. The last thing you want is for an employee to sink your ship before it gets out to sea.
Robert Conway has managed his own small business for several years now. When he has some free time, he likes to help others starting out by posting his insights online.