Startup Business Insurance

Starting a new business? If the answer is yes, then you’re likely swamped with a million different things to take care of. At this point you’ve likely already sought out legal advice, have a well-rounded business plan, and employees picked out, but did you remember to get insured?

 

Protecting your business from the get-go with a comprehensive policy is crucial to running a smooth operation, and mitigating costly risks. But with so many different variables, it’s hard to know where to start or what you really need. Luckily, we’ve got a guide that includes all of the necessities to ensure a smooth launch. 

 

Jump To:

• What is Startup Business Insurance?

• What Types of Insurance Do Startups Need? 

• How Much Does Startup Business Insurance Cost? 

• FAQs

• Get Startup Business Insurance Today!

What is Startup Business Insurance? 

Startup business insurance refers to a variety of insurance policies all designed to protect brand new businesses from a number of unique risks. While every startup company has their own set of requirements, most startup business policies protect against common financial risks, legal liabilities, and unanticipated losses.

 

 Since many startup companies have a strict budget to maintain, having the proper insurance coverage is essential so business can continue to grow even if experiencing a lawsuit, property damage or other costly incident. 

What Types of Insurance Do Startups Need? 

Every business is different. Depending on the line of work a business is in, the risks associated with operating will vary. While your business may not need every single type of policy listed below, the following are the most common insurance coverages that startup companies invest in: 

 

• Worker’s Compensation Insurance: This coverage pays for medical care and replaces lost wages for workers who become injured or sick due to work-related factors. This is legally required insurance coverage (except in Texas). Insurance cost averages around $2 for every $100 in payroll.
• Disability Insurance: Required in some states, this coverage protects employees if a non-work related injury or illness causes them to miss work. This coverage is legally required for businesses operating in Rhode Island, Hawaii, New Jersey, New York, and California. 
• General Liability Insurance: Covers claims of third-party bodily injury and property damage, as well as advertising-related damage. 
• Commercial Property Insurance: Covers the costs to replace or repair physical assets that are damaged in covered events. These events include storms, fires, theft and vandalism. Coverage generally pays for assets like buildings, offices, equipment, inventory and furniture. 
• Professional Liability Insurance (Errors and Omissions Insurance): Protects business against claims involving professional errors, negligence, bad advice, and failure to deliver promised services. This coverage is crucial for businesses offering professional services such as consultants, accountants, attorneys, and healthcare professionals.
• Business Owner’s Policy (BOP): A combination policy that includes both general liability and commercial property insurance, for a discounted price.
• Product Liability Insurance: Covers claims resulting from defective products, malfunctioning products, or mislabeled products. This policy type is essential for any entrepreneur who sells, distributes or manufactures goods. 
• Cyber Liability Insurance: Covers the costs of incidents relating to hacking, data breaches and cyber attacks. Crucial for businesses storing large amounts of data, this coverage generally helps pay for data recovery, client notification and related legal costs. 
• Business Interruption Insurance: Helps businesses by paying for operating expenses if they’re forced to shut down temporarily due to an unexpected event. Funds can typically be used to pay employees, pay for taxes, relocation costs, and other fixed expenses. 
• Employment Practices Liability Insurance (EPLI): Protects businesses against lawsuits filed by employees. These lawsuits include claims involving discrimination, harassment, wrongful termination and more.  
• Commercial Auto Insurance: Protects against accidents, vehicle damage and liability claims. This coverage is legally required in all states except New Hampshire for businesses using vehicles in their day-to-day operations. 
• Directors and Officers (D&O) Insurance: Protects company leaders from personal loss if they are sued over wrongful management decisions, misuse of company funds, fraud, or breach of fiduciary duties. 
• Small Business Health Insurance: Companies with employees should consider investing in a group health insurance policy. Options included traditional fully-insured plans, self-funded plans, level-funded plans and HRAs. While each option operates slightly differently, they all generally provide employees with basic health benefits covering the costs of doctors visits, medications, emergency services and much more. If you are running a startup business on your own, consider an individual health insurance coverage option. 

How Much Does Startup Business Insurance Cost? 

The cost of startup business insurance varies greatly depending on a number of factors. Here are some of the things that insurers consider when determining policy rates: 

 

• Location: Local laws and risks may affect the cost of coverage. 
• Industry: Industries that have higher risk factors may have to pay more for their policies. 
• Claims History: Freelancers with an extensive history of lawsuits or claims may experience higher insurance costs.
• Coverage Limits: The higher your coverage limits are, the more protection a policy provides, but that also means it’ll be more expensive than a policy with a low coverage limit. 
• Number of Policies Needed: Freelancers needing multiple polices will pay more overall than someone who only needs one policy. 

Below are the average costs of some of the most common startup business insurance policies. Keep in mind that the averages may not reflect the actual amount that you’ll pay for a policy, and it’s best to work with a professional broker like EZ.Insure, to get an accurate quote:

 

• Business Owners Policy (BOP): $50-$60 per month
• General Liability: $30-$50 per month
• Professional Liability: $60-$75 per month
• Cyber Liability: $100-$200 per month 
• Commercial Property: $40-$60 per month. 

FAQs

What insurance does a new business need?

We recommend all new businesses get worker’s compensation (required in most states), general liability, and commercial property insurance. These three policy types ensure that your staff, assets, and clients are well-protected. Additionally, depending on your industry, professional liability or product liability may be crucial too.

 

Can I start a business with no insurance?

As discussed, some insurance types like workers’ compensation are legally required. Otherwise, the answer is yes, but it’s risky. Be sure to check your state laws regarding insurance requirements and understand that with no insurance, you could face major financial liabilities.

 

Is business insurance tax-deductible?

Yes, in general business insurance premiums are tax-deductible as business expenses.

 

Do I need insurance if I’m a home-based business?

Yes, like all other businesses, home-based companies still face risks including property damage and liability claims.

Get Startup Business Insurance Today with EZ.Insure!

While starting a business from the ground up comes with a number of challenges, getting insurance doesn’t have to be one! Whether you’re simply looking for one type of policy or multiple comprehensive protection plans, EZ.Insure is here to help!

 

Our user-friendly platform offers free, no-obligation quotes, side-by-side plan comparisons and 24/7 access to licensed insurance experts. No matter what your needs and budgetary restrictions are, we’ve got a plan for you!

 

To get started click the button below or call us directly at (844)-770-0876.