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You have always been a dreamer. Now that you’ve graduated from college, you put your dreams into motion and started your own business. At this point, you have a great idea, an excellent team and the capital you need to set up shop. Now, it’s all about protecting yourself, your workers and your business with business insurance to ensure that you are going to run a thriving operation no matter what.
Before you dive headfirst into executing your business plan, you must look into business insurance options to keep your company safe and secure. Whether you are creating the next big social media site or a revolutionary, life-changing app, having the right business insurance policy is vital to your company’s success.
Why do you need business insurance?
Business insurance is critical for a number of reasons. Some of the most common ones are:
- Your products or services injure customers, or customers get hurt when they step foot into your office or store
- Your employees become injured (or worse) while on the job
- Employees or customers want to sue you for injury or any other liability claim
- You cannot afford attorneys to protect you if a lawsuit is filed against your company
- You or one of your employees was negligent when providing a professional service
- Your business equipment becomes damaged
Startups are especially susceptible to claims because they typically have little funding. Multimillion or billion dollar corporations can afford attorneys and/or to settle out of court with customers and employees, but most startups can’t. Business insurance ensures that under most circumstances, you are covered.
The types of business insurance you need
There are various kinds of business insurance you can choose from depending upon your company’s activities. Most likely, you will want to purchase a few or all of the following types of insurance.
General liability insurance is critical for every single business. It protects you and your workers from claims of property damage and cases involving bodily injury. In terms of property damage, your landlord may bring a case against you if your employee accidentally broke an appliance in your office, for example. If a colleague comes to your office, trips on the rug, hurts himself and decides to sue, general liability insurance will protect you and your business.
General liability also covers copyright infringement. This may come up if another business owner believes you have copied her and wants to bring a case against you. There is also reputation damage, which would come up if, let’s say, an employee bashed one of your competitors online and the competitor chose to sue you.
If there are any cases brought against you in the court of law, general liability insurance will pay for attorneys and investigation fees, medical expenses, awards for the plaintiff and posted bonds.
By law, you have to sign up for workers’ compensation insurance unless you are in Texas. If employees are injured in the workplace or suffer illness because of some workplace conditions, this insurance will pay out any medical expenses as well as their salary when they are out of work. If an employee or a member of an employee’s family decides to sue because of injury or death, workers’ comp will protect you.
Professional liability is important if you are providing professional services. For example, you may contract out employees to install security systems in business offices. If they do not install the systems properly, and those offices are robbed, the office owners could sue you for not doing the job right.
Even if you are not providing physical services, you may need this insurance. For example, it would apply if you were a consultant and gave bad advice to a client. If the client suffered because if it and filed a claim, you would be covered.
Even if you’re a startup with a small number of employees, you may need a lot of equipment to perform your day-to-day tasks. If this equipment gets damaged, it will not be covered under general liability. You will need business property insurance to protect your equipment, inventory, building and signs in case there is a fire, flood, storm or any other occurrence.
If you are making products for sale, your startup must invest in product liability insurance. For example, if one of your products hurts a customer, that customer may come after you. Product liability would cover you in this case.
A natural disaster can occur at any time, which is why some companies choose to utilize business interruption insurance. This insurance will cover you if you lose income during a natural disaster or any other type of catastrophic incident.
If your startup requires that employees use company cars, you will need to purchase business auto insurance. That way, if your employees get into accidents while driving on the job and injure themselves, others and/or the vehicles, you will be protected.
Getting started with insurance
By teaming up with an insurance agent, you can find the best coverage for your business. Then, as you continue to grow and flourish, you will be protected under any and all circumstances.