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Commercial Insurance for Startups

You’re not starting any ordinary small business. You’re building a startup. Your goal is to grow and, in order to do this, you not only need a solid business plan, but also protection for everything that you’re building. Startups are inherently risky, so it is extremely important that you get the right commercial insurance coverage.

Insurance for the First Stages

If you’re in the first, or seed, stage of building your startup you are probably excited – and nervous about everything that’s to come. Maybe you’re not thinking about insurance, or think that it’s something that can wait until you’re further along in the process. Nothing could be further from the truth.

Startups are all about investment, and you need to think of commercial insurance as another investment to grow your business. Without it, you won’t be able to attract the best employees or convince investors that you are serious about your venture and are planning ahead for the long run. Even before you have customers, you should have the following policies:

General Liability – something that all businesses should have, this type of insurance protects you against lawsuits claiming bodily injury or property damage. But did you know it also provides coverage for personal and advertising injury like libel or slander?

Commercial Property – if you’ve got office space, then you need this type of policy to protect everything in it from risks such as fire or theft. There are commercial insurance packages available that will bundle liability and property coverage.
Workers Comp – if your startup has or plans on having employees, be aware that this type of coverage is required by individual states. It covers medical expenses and lost wages for an employee who is injured at work.

Tech E&O vs Cyber Liability

Once you’re past that first stage of getting your initial funding, setting up your space, and hiring your employees, it’s time to start thinking about what happens once you are up and running. Now you have customers, and a whole new set of risks.

The above type of insurance policies apply to all businesses, but you may need some specialized coverage for your startup. If you’re dealing with any kind of tech, as many startups do, there are two types of policies you should look into: tech errors & omissions (E&O) and cyber liability insurance. They may sound similar, but they cover different things.

Tech E&O – If you’re a business selling a physical product, then you need product liability in case a product fails. If you’re a firm offering financial or legal advice, then you need errors & omissions to protect yourself against claims of financial damage. If you’re a tech startup, then you need tech E&O. This type of coverage protects your company in the event that one of your tech-based products fails. If you are developing or licensing software, it is important to note that the insurance industry considers software a service and not a product. Because of this, you will need tech E&O, and not the same type of product liability coverage that might be sufficient for other businesses.
Cyber Liability – There is one very important thing that that tech E&O doesn’t cover: third-party data breaches. 43% of all cyber attacks happen to small businesses. With all the risks of cyber crime today, this type of insurance is essential if you store any kind of customer data.

While tech E&O covers the failure of software, cyber liability covers the loss of private third-party information. Depending on your startup, you may need both to be fully covered.

As You Grow

If your startup is taking off, congratulations! You’re growing, and are probably looking for more investment and taking on a board of directors. In this case, you’ll need another specialized type of coverage: Directors & Officers insurance.

This type of insurance covers both your business and your management, including their personal assets. It covers:

Theft of trade secrets

Misrepresentation, in the case that investors feel they were given
misleading information, leading to loss
Wrongful acts, covering anything that managers do in their professional capacity that stakeholders deem “wrongful,” and that results in a loss

Having D&O is important for attracting investors, who will feel more confident placing their trust (and money!) with you if you have comprehensive coverage. Your board members/managers will also feel confident making decisions without risk of personal liability.

Startups are unique among small businesses. They’re riskier, but they have more potential for growth. If you’re one of the few who have the vision and the drive, make sure that you protect everything you’re building. And remember, EZ.Insure is here to help you sort out your commercial insurance needs. We’re unique, too! We want your startup to succeed and will work with you to keep you covered. Our services are always free and nobody will ever hound you with endless calls. You have enough to worry about! To get started simply enter your zip code in the bar above, or you can speak to an agent by calling (855) 694-0047.

Do You Need a Certificate of Insurance?

There are lots of ways to spread the word about your business, from advertising to word of mouth to social media marketing. All of these things help to get your name out there, and tell people that you’re the best in the business. Your potential customers or clients also want to know that they can trust your services and advice. They want to know that, if anything goes wrong, you will take responsibility and make things right. Let’s take a look at what a COI is and why it is important.

What Is a Certificate Of Insurance?

piece of paper with signature and red certification circle on the bottom — *A COI is a physical or electronic document that proves you have a valid commercial insurance policy.*

If you have a car, then you have auto insurance, right? And if you have auto insurance, then you have an insurance ID card in your glove compartment. Think of a certificate of insurance as something similar. A COI is a physical or electronic document that proves you have a valid commercial insurance policy. It is a quick overview of the policy you hold, and includes:

Your name and business information
The insurance company that issued your policy
The policy number, effective date, and expiration date
The type of policy (such as general liability or professional liability)
Policy limits and deductible amounts
Additional insured, meaning anyone else who is covered under your policy

These certificates might be packed with information, but they are only one page long. This means that you can post them in your place of business, or easily show them to clients (instead of having to pull out your multi-page insurance policy).

Do I Need a COI?

If your business provides advice or services to customers or clients, then there is always the possibility for things to go wrong. A handyman might accidentally put a ladder through a window, a freelance IT tech could miss a data breach, a contractor might be overseeing a building site where someone gets injured. To protect against claims of physical injury, property damage, financial loss, or even bad advice, you

need at least one type of commercial insurance policy, and a certificate of insurance to go along with it.

Not many companies or customers want to work with a business that doesn’t have insurance, so being able to show them that piece of paper is an extremely important way to keep your business growing. If you are a contractor, then you will probably be required by the companies that hire you to show a COI. Other business owners can preemptively offer a COI to a client as a way to earn trust, get an edge on the competition, or simply show that they are professionals who take their business seriously.

How Do I Get One?

caucasian hands with one hand on laptop keyboard and the other hand holding a cell phone — *If you need certificates of insurance to give to clients, you can contact your insurance company, agent, or broker.*

Finally, there’s something fairly simple associated with your business insurance! Getting your initial certificate of insurance shouldn’t require any extra work on your part, it should be included – for free – with all of the documents you receive after purchasing your policy. If you need additional certificates to give to clients, you can contact your insurance company, agent, or broker. These additional certificates are also free and should be quick and easy to get. If you need to add your client as an “additional insured” or add extra coverage for a specific job, then it may take a few days to a few weeks to get a new COI.

When it comes to your commercial insurance, your policy should be “if you’ve got it, flaunt it.” If you’ve taken the responsible step of insuring your business, then let your customers know – and watch your business take off. If you’re shopping around for commercial insurance, or need a new plan, then EZ.Insure is the place to be. We’ll answer all of your questions, give you instant quotes, even sign you up – all for free! Don’t go another day without the policies that will get you noticed, or with a policy that’s not working for you. Get started with us by simply entering your zip code in the bar above, or speak to an agent directly by calling 888-615-4893.

What Does a Pandemic Have to Do with Cyber Liability Insurance?

No matter what kind of business you run, cybercrime is always a threat. But there are some very scary statistics surrounding cybercrime attacks in regards to small businesses: according to the 2018 Verizon Data Breach Investigations Report, 58% of cyber attack victims were small businesses. Not only that, but studies show that 60% of small businesses who needed to suspend operations after a cyberattack were never able to reopen.

You may be thinking that cyber security isn’t top of your list of priorities right now, but you could be making a very costly mistake. The recent focus on keeping businesses running while also keeping employees safe has actually meant a rise in cyber crime.

Working from Home

caucasian woman sitting at a table with laptop in front of her — *Nearly 35% of people who were working pre-COVID19 were working from home by April.*

Face masks, social distancing, toilet paper shortages, everyone has felt the effects of the recent pandemic. One of the biggest changes to many people’s lives has been the switch from working in an office environment to working from home. In fact, according to an MIT study from early April, nearly 35% of people who were working pre-COVID19 were working from home by April. Add that to the roughly 15% of people who were already working from home and you have, by some estimates, close to 50% of the workforce working from home.

Time will tell whether working from home is here to stay, or whether we will all eventually head back to the office. While there are many who are skeptical that we will become a fully work-from-home economy, there are many who believe that the way we work is forever changed. According to Patricia Strach, interim executive director at the Rockefeller Institute, “this forced work-from-home experience is showing us that work-from-home arrangements are a viable strategy for many businesses and that this is likely to be true even after the crisis is over.”

The Risks

While there are many advantages to working from home, there are also drawbacks. One major disadvantage is that more employees working from home seems to equal a big rise in cyberattacks. One type of attack that is on the rise seems to be directly related to the recent pandemic: phishing expeditions. Businesses have reported receiving a huge amount of phishing emails, which are used to implant malware in a computer that can give hackers an opportunity to demand a ransom or steal data. The phishing links that employees most often clicked on were ones that claimed to be information about the coronavirus. Cybercriminals have been taking advantage of people’s hunger for information on the virus to gain access to business’ data. According to Marc Rogers, head of security at the long-running hacking conference Def Con and a vice president at security company Okta Inc., “I’ve never seen this volume of phishing. I am literally seeing phishing messages in every language known to man.”

So many employees logging in from so many locations also poses a big problem. Without a strong virtual private network (VPN), or if employees are using public networks, then every time someone logs on they are exposing data to hackers.

Workers are also more likely to click on links or visit websites they wouldn’t normally visit in the office. Not only that, they are all downloading legitimate software like Zoom for meetings – and each time they do so, a cybercriminal has a chance to hack into a company’s computer systems and steal data and passwords. According to Darren McGraw, president of Mechelsen Private Client, “all of a sudden, [so] many employees are scattering and connecting from different directions. So this creates a great deal of opportunity for cyber criminals to jump in where maybe the business hasn’t had a chance to control.

Protecting Your Business

laptops, tablets, and phones all in a circle being used by people, with padlocks all around. — *“Firms that will do the best if they’re hit with a cyber attack are the firms that have a robust cybersecurity plan in place.”*

It is unfortunate that there are people out there who will take advantage of a crisis to try and make a quick (and illegal!) buck. But it is something that you and your business need to be prepared for. The first line of defense, is, of course, prevention. According to Lisa Lindsay, executive director of Private Risk Management Association, “Firms that will do the best if they’re hit with a cyber attack are the firms that have a robust cybersecurity plan in place that is continually vetted, reviewed and practiced so that employees know the standard operating procedure. If they believe that a breach has occurred or that they may have been infected, they know exactly who to call and what to do in a timely fashion.” In other words, be prepared.

But, as we have seen, unusual times such as we’ve experienced recently often mean that criminals will change their tactics or become more sophisticated. It is important to have the right insurance to protect you in case the worst does happen, because your general liability insurance excludes cybercrime. In these cases, you will need cyber liability insurance, which can cover damages to your customers as well as damages to your business.

You don’t need to go it alone when it comes to finding the right cyber liability insurance for your business. EZ.Insure is here to help, and will connect you to your own knowledgeable agent. With one of our agents, you never have to wonder if you’re going to get the right protection at the right price. To get started with us – for free – simply enter your zip code in the bar above, or you can speak to an agent by calling 888-615-4893.

How EZ.Insure Can Protect Your Business From A Lawsuit

Accidents happen. If an employee gets hurt at work, not only can you lose a lot of money in a lawsuit, but you can lose your business as well. The best way to protect yourself is with a Workers’ Compensation Insurance Plan. This will protect your business in the event of an employee’s injury or death at the workplace. EZ.Insure knows how important your business is, and we want to protect your business from a lawsuit that could happen at any point in time.

What Is Workers’ Compensation?

Person being taken out on ambulance — *If an employee gets hurt on the job, it can end up costing you your business if you are not insured.*

Often referred to as “workers comp,” every state has made it mandatory to provide this type of insurance program to employers. The insurance serves both the employee as well as employer; it assures injured employees that they will receive the compensation and medical care needed until they are able to go back to work.

This also protects employers from a lawsuit when an employee is injured on the job. Every state has its own regulations for the program, and while some have a federal insurance plan, some businesses choose private insurers.

The Different Types Of Benefits

In most cases an employee will receive benefits whether the disability is permanent or temporary. Some states will allow the employee to be compensated for the time out of work, while others specify a maximum number of weeks for temporary disabilities.

An injured employee will receive:

Medical Care
Replaced Income
Retraining Costs, if necessary

Also, if killed on the job, then eligible dependents will receive workers’ compensation for generally 500 weeks at the wage of the deceased employee.

Benefits For Your Business

weighing between person in a suit and person falling — *Workers’ compensation insurance protects your business from a lawsuit when someone gets hurt on the job.*

When you purchase Workers’ Compensation Insurance, you are purchasing protection for your business. Your business will receive many benefits that will keep it from going out of business. The different benetis are:

Protection from lawsuit or large financial loss
Coverage for legal costs
Coverage for certain types of illnesses and injuries
Coverage for funeral expenses and dependent support
Coverage for a percentage of reimbursed wages to employee

When you purchase worker’s compensation, it’s good to be aware of your state’s specific requirements and laws. Make sure you’re up to date with the current insurance policies so that if something were to happen, you know exactly what to talk to your employees about.

EZ.Insure understands that businesses need to be informed to make the best choices for their future. We provide you with a highly trained agent with your region that will answer any questions you have, compare different plans for you, and even sign you up when you’re ready, free of charge. You will never have to worry about being hounded by endless calls when you use EZ.Insure. We promise to offer straight to the point, no-hassle, accurate quotes in order to help you protect your business. To get started simply enter your zip code in the bar above, or you can speak to an agent by emailing [email protected] or calling 888-350-1890. We look out for your business as if it was our own.

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