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You are here: Home / Guest Articles / What Kind of Insurance Do I Need For My Start Up?

What Kind of Insurance Do I Need For My Start Up?

January 7, 2014 By Melinda Emerson 1 Comment

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What Kind of Insurance Do I Need For My Start Up?Guest Article

Small businesses need insurance protection just as larger companies do, but when your margins are thin or sales are sluggish, you have to cut costs, which often means forgoing small business insurance. This is doubly true for start-ups that are often short on operating capital.

No matter how appealing skipping business insurance may seem, this should not be one of your cost-cutting measures. You can view insurance as another cost of doing business, or you can view it as an asset designed to protect your fledgling company against claims and lawsuits – which typically cost much more than an insurance policy would.

So what are the essential types of business insurance coverage you need to consider for your start-up?  Luckily it’s not all that complicated. Here is a breakdown of the three main types to consider.

1.     Professional Liability Insurance

If your start-up provides services, you should consider professional liability coverage to protect against errors and negligence.  Professional liability insurance, also known as Errors and Omissions insurance or E&O, insures the actual services your business provides. Be sure that any policies you’re considering will appoint an attorney to defend you or reimburse you for defense costs in a lawsuit, even if you’ve made no mistakes.

2.     General Liability Insurance

This is the policy that covers the general ‘slip and fall’ risks.  It covers physical damage to others and their property as well as protects your start-up from claims of libel and slander. Many retail space owners require tenants to carry this type of insurance so they can protect their property.

3.     Business Owner’s Policy

Start-ups that own their business location or have valuable business equipment should consider a business owners’ policy (also called a BOP).  This type of insurance protects against damage to the property owned and used by the business while conveniently also including coverage found in general liability insurance.

When shopping for your start-up company’s business insurance, look for an insurance carrier that understands your type of business and tailors your insurance policy to your specific needs.  For instance, photographers need insurance that will protect them against claims arising from the failure to deliver services due to a faulty memory card, and real estate agents need insurance that will protect them from claims filed for negligence in researching a home’s value if their client feels like they over paid for their home.

As the founder of a start-up there’s no doubt you’re facing numerous challenges.  Don’t let a lawsuit be one of those challenges by securing small business insurance tailored to your needs.  Once you have business insurance you’re confident in, you can focus attention on what you do best: generating revenue in your start-up business.

Disclosure: Hiscox Insurance Company compensated the publisher of www.succeedasyourownboss.com to publish this post.

Kevin Kerridge

About the author:  Kevin Kerridge is the director of small business insurance for Hiscox, a company that provides customized business insurance for small business professionals such as consultants, IT professionals, graphic designers, and many more. 

Hiscox small business insurance is underwritten by Hiscox Insurance Company. Inc., a Chicago-based insurance company that is licensed in all states and DC. The contents of this article and the linked materials do not offer legal, business, or insurance advice related to the needs of any specific individual business. Claim scenarios are for illustrative purposes only and are subject to the terms and conditions of the policy in question. Please consult your professional advisor.

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Filed Under: Guest Articles, Starting A Small Business Tagged With: @HiscoxSmallBiz, small business info, small business insurance, starting a small business

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Melinda F. Emerson, “SmallBizLady” is America’s #1 Small Business Expert. She is an internationally renowned keynote speaker on small business development, social selling, and online marketing strategy. As CEO of Quintessence Group, her Philadelphia-based marketing consulting firm serves Fortune 500 brands that target the small business market. Clients include Amazon, Adobe, Verizon, VISA, Google, FedEx, Chase, American Express, The Hartford, and Pitney Bowes. She also has an online school, www.smallbizladyuniversity.com, that teaches people online marketing and how to start and grow a successful small business and publishes a blog SucceedAsYourOwnBoss.com. Her advice is widely read, reaching more than 3 million entrepreneurs each week online. She hosts The Smallbizchat Podcast and is the bestselling author of Become Your Own Boss in 12 Months, Revised and Expanded, and Fix Your Business, a 90 Day Plan to Get Back Your Life and Reduce Chaos in Your Business.

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