Opening a new business is the culmination of a great deal of planning, much of it around securing financing and investors. There is a strong chance that your potential investors will require proper risk management before taking the leap. That means finding the ideal insurance plan, and without it, you may never see launch day.
What is the right insurance?
The right insurance for you and your company will be different depending on the industry you are in and the volumes that you work with. You will almost certainly need a general liability insurance policy, which protects against financial losses from accidents, certain civil lawsuits and the like.
After that, you may have to consider:
- Product liability insurance: If your company sells products, there is a possibility that those products may cause harm. Even innocuous products have the potential to cause injury.
- Commercial property insurance: This coverage extends protections to the premises and contents of your business in the event of damage from fire or other emergencies.
- Owned and Non-Owned Automobile coverage: This covers your personnel who drive while on the job, whether in a company vehicle or their own.
- Workers Compensation or Employer Liability insurance: This may be required by law.
- Umbrella or Excess Liability coverage: This provides additional coverage.
If a specific type of loss threatens your company, there are specialty insurance options for particular needs. You might consider Business Interruption coverage, Employment Practices coverage and Cyber Liability insurance. If you have outside directors or a business with particular risks, you may want Director and Officer Liability coverage. Another type of insurance, Errors and Omissions coverage, is common for businesses that provide professional services.
A small question with an outsized impact
Of the decisions you will make as you build your startup, insurance may seem like an afterthought. However, a comprehensive, detailed insurance plan is one of the best indicators for success through those first vital years.