Why You Need Business Insurance

What Is Startup Insurance?

Startup insurance refers to the various types of insurance specifically designed to meet the needs and risks newly established businesses face. Individuals obtain homeowners’ or health insurance policies to insure their personal interests. Startup insurance does the same—but applies only to business interests. Depending on the type of coverage obtained, business insurance can help protect a startup from financial losses resulting from lawsuits, property damage, or other unforeseen events and liabilities. By obtaining the right insurance coverage, startup and small business owners can better protect their assets, mitigate risks, and ensure the enterprise’s continuity, future growth, and success.

Do I Need Insurance for a Startup Business?

In short, the answer to this question depends on a few considerations. Whether and to what extent your business may be required to obtain business insurance will depend on factors such as:

• The type of goods or services you provide

• Whether your business has employees

• The state in which your business operates

For example, some states and industries may require certain professionals, such as doctors, lawyers, or engineers, to carry professional liability insurance to protect against claims of negligence or errors. Additionally, if your startup has employees, most states will require that you obtain workers’ compensation, which is designed to provide benefits to employees who suffer work-related injuries or illnesses. That said, regardless of whether or not you are required to obtain insurance for your startup or small business, doing so is almost always strongly recommended.

Startup Business Insurance Costs

The business insurance cost for a startup will ultimately depend on a variety of factors, such as the following:

• Types of coverage needed to protect your company

• Particular industry in which your venture operates

• Location or locations where you conduct business

• Number of individuals employed

• Financials of the business (e.g., annual revenue, amount of assets, etc.)

The cost of business insurance can vary significantly. Thus, don’t feel like you have to go with the first quote you receive. Be sure to shop around and compare various policies, benefits, and rates. Such comparison will help to better ensure you get the right policy for your business’s needs and goals at a price that works with your budget.

Common Types of Insurance Coverage to Consider for Your Startup or Small Business

Why You Should Obtain Business Insurance for Your Startup

No matter how well you plan, there is always a chance that problems may arise, including:

• Fires or other natural disasters

• Physical injuries

• Data breaches

• Theft

• Lawsuits

Obtaining insurance for your startup or small business is one of the best ways to protect your company from these or other unexpected events that could otherwise lead to significant losses and interruptions to your operations. Your enterprise is a critical investment. Thus, even if business insurance isn’t required for your startup, obtaining some level of coverage is one of the best things you can do to protect your business and provide peace of mind as you continue to build toward your long-term success.

Disclaimer: Bizee and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction.