You might be excited about setting up your startup business. With so many things to prepare and take care of, it is easy to get overwhelmed. However, if there is one thing that you should never forget, it’s insurance.
Insurance products are important to give sufficient protection to your starting and growing company. However, it is not enough to have insurance. You must have the right insurance products that will provide your company with sufficient coverage.
The moment you open your doors for business, you are not only opening yourself to your customers. You are also exposing yourself, everything you have worked for, including your personal assets, to several risks.
The moment you hire your first employee, the moment you make your first successful sale, you are exposing your business to risks as well. This is why startups need to have the right insurance products. One lawsuit, one court battle, and everything you have worked hard for can be erased instantly.
Insurance products created specifically for businesses are readily available for you to take advantage of. Here are the top insurance products that your business should have.
General Liability Insurance
Everyone makes mistakes. Even your best men will make a mistake along the way. Liability insurance gives you coverage against negligence claims. Do not wait until a personal injury attorney knocks on your door before you get your act together.
If your company is found guilty, you and your company are at risk of bankruptcy. It can expose not just your company’s assets but even your personal assets as well.
General liability insurance protects your assets from claims that arise from the following unforeseen events:
- Bodily injury of a third party – In the unfortunate event that a customer gets hurt, which involves your business or company, liability insurance can cover all medical and recovery costs. It also takes care of all legal costs in case the customer will file for a claim.
- Property damage – If your company accidentally damages a third-party’s property, your general liability insurance will pay for its repair or replacement.
- Product liability – Sometimes, a defective product can cause damage or illness. You can be sued for the harm that your products might have caused to your customers.
- Advertising injuries – If your company gets sued for copyright infringement or libel, general liability insurance can cover all the legal expenses that you incur.
A fire can turn everything that you own into ashes. Whether you own the space where you operate or are just leasing it, you need property insurance. Property insurance can give you coverage for damages caused by storms, fire, or theft. Fires and earthquakes, however, are not covered by property insurance policies. If you want to be covered for these events, talk to your insurance agent if you can get a separate insurance policy.
Business Interruption Insurance
Your business operations can be affected in the events of natural calamities and disasters. A business interruption insurance will cover the lost income you might suffer if your operation has to stop for a while. You can usually get this insurance as an add-on to property insurance or other insurance policy. A business interruption insurance covers the following:
- Profits lost – These are the earnings you would have earned if the incident that caused your business’s interruption did not occur.
- Fixed operating costs – This includes the costs of running your business.
- Payroll – While your operation is on pause, you might not want to go through the hassle of losing your employees. With this insurance, you can still pay for the wages of your workers.
- Taxes – Regardless if a disaster has halted your operations, you will still have to pay for taxes. This insurance will help you pay your obligations on time.
- Loan payments – Another financial obligation that you should not miss even if you have no income is the payment of your monthly loans.
Workers’ Compensation Insurance
Once you hire employees, you will need to get workers’ compensation. It is government-mandated insurance that will pay your employees with monetary benefits if they become injured while on the job. Workers’ compensation insurance will also cover the medical and recovery care of your employees.
As an employer, you can have the state-administered workers’ compensation, or you can choose to self-insure. You will need to check with the state where you operate on their workers’ compensation program and regulations.
Having workers’ compensation insurance also protects you from personal injury lawsuits from your employees.
If you are using vehicles under your company name to run your business, you should get them insurance. This will protect your business and assets in case of vehicular accidents involving your company vehicles.
You can avoid significant financial loss and possible closure and bankruptcy with the right insurance products. Be sure to have sufficient coverage for your peace of mind, so you can focus on running and growing your business.