Why New Businesses Need Startup Insurance

Starting a new business? If the answer is yes, then your likely swamped with a million different thing 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 for you here that includes all of the necessities to ensure a smooth launch. And if you’re thinking specifically about your employees, we have another separate section exploring group health insurance.

Types of Insurance for Your Startup:

Worker’s Compensation Insurance

This coverage pays for medical care and replaces lost wages for the worker affected.
This is required insurance coverage. (Except in Texas)
Insurance cost is averages around $2 for every $100 in payroll.

Unemployment Compensation Insurance

Guarantees a portion of wages to employees in the event of a lost job.
This is required insurance.
Insurance cost varies by state.

person writing in notebook between two laptops — *Planning for unforeseen disasters now can save you headaches later.*

Disability Insurance (Required in Some States)

This covers your employees if an illness or injury causes them to miss work.
Rhode Island, Hawaii, New Jersey, New York, and California require this.
Insurance cost will be about .25%- .5% of payroll.

General Liability Insurance

Covers the costs of someone else injuring themselves on your property or from a business service/product.
This is not required coverage.
Average liability coverage is around $500 per year but may increase or decrease depending on businesses risk level.

Commercial Property Insurance

This covers your physical property and spaces that belong to your business. (Including weather, vandalism, or theft)
This is not required coverage.
Average insurance cost is about $1500 per year.

Professional Liability Insurance

This is also known as Errors and Omissions insurance. You’ll need this for higher risk businesses such as lawyers or doctors.
This is not required insurance.
Average insurance cost is about $1350 per year.

Product Liability Insurance

This coverage protects you from faulty merchandise. If you operate with a manufacturer and/or packagers, this can cover you in case they make a mistake.
This is not required insurance.
The cost will be about .25￠ for every $100 in retail sales.

Employment Practices Liability Insurance

This coverage protects you in cases of sexual harassment lawsuits or otherwise.
This insurance is not required by law
These policies have wider ranges due to many factors such as employee number, turnover, and type of business. The range will be from $800-$3000 per year.

Key Person Insurance

This insurance type covers your business in the event that the business owner or another key personnel member dies or becomes disabled.
This is not required insurance.
Less than $1000 per year

Other Insurance Policies For Your Startup

Business Vehicle Insurance

Covers vehicles used for the business

Directors and Officers Liability Insurance

Covers the directors and officers of non-profit businesses in lawsuits claiming they mishandled their business

Business Identity Insurance

Covers cases of identity theft, even going so far as to notify your customers for you should you have their information

Terrorism Insurance

Covers cases of terrorism affecting your business. Check to make sure it is not already bundled with your other policies.

Protect Your Business With EZ.Insure

Of course, we hope you never have to take advantage of these types of startup insurance. However, when it comes down to it, it’s best to keep everyone covered. Whether you’re a home-based business or a larger one, you’ll benefit from the extra support.

EZ.Insure offers a helping hand by matching business owners with the perfect startup insurance plans guaranteed to line up with your needs and budget. Your agent will answer any questions you have, compare the plans for you, and even sign you up, free of charge. To get started simply enter your zip code in the bar above, or you can speak to an agent by calling 855-694-0047. We make the entire process easy, simple, and quick.

FAQ

What insurance does a new business need? We recommend all new business 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 your industry, professional liability or product liability may be crucial too.
How much does business insurance cost for a startup? It all depends on the business size and specific type of coverage. For instance, general liability insurance averages at around $500 per year, while commercial property coverage is closer to $1,500 per year.
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.

Starting a Business? Avoid These 10 Major Mistakes!

Nobody said starting your own business would be easy. There are so many moving pieces, and you are responsible for everything. The pressure of solo entrepreneurship can lead to stress, setbacks, and tough decisions. There are no guarantees that you’ll make it: in 2019, the Bureau of Labor Statistics reported that only 20% of businesses keep their doors open past the first year, and 50% of those who do stay open close in their second year. Opening and sustaining a business requires funding, timing, and faith. While we can’t give you those three things, we can share some of the hard-won lessons from businesses that didn’t make it. Here are the top 10 common mistakes business owners make, and how to avoid them and survive your first crucial years.

man sitting in front of a laptop with his hand on his head and phone to his ear. — *Don’t think you can start a business alone. You need a great staff.*

Thinking you can do it alone.

To be an entrepreneur means being committed, dedicated, and independent. You see yourself as a jack of all trades and are often keen to do everything on your own. Waiting to hire staff or to outsource responsibilities could be catastrophic, though: as you become busier and busier, you might overlook important details, or let necessary tasks fall by the wayside. Hiring, training, and retaining quality staff before it becomes necessary is a must-do for all new business owners.

Taking too much advice.

When you announce your plan to start a business, everyone is going to have advice for you. Family, friends, neighbors, colleagues… you name it, they’re going to have something to say. Generally speaking, ignore it all. Seriously! Unless the advice is coming from someone who is financially invested in your business or who you truly consider a mentor, accept it gracefully and then disregard it. This is your business, and your life. Taking advice from someone lacking expertise could cause you to doubt yourself, or even to make a catastrophic mistake.

Living outside your means.
Do not live outside your means or your business will fail.

People say that “the first year is the future year” – the foundation upon which your business can thrive, or dig itself into a hole, so don’t send your business to an early grave with overspending. Starting a business is a financial investment, but you shouldn’t feel pressured to purchase high-ticket items when there are reasonably priced alternatives. You may feel confident enough in your vision to justify it, but your best bet is to live within your means for the first few years.

Cutting the wrong corners.

Frugality is important when starting a new business, but there are some things you just can’t cut corners on. Insurance is one of these things. Monthly premiums may seem like a burden, but they are significantly lower than the legal fees or repair costs that you might be hit with if you don’t have insurance. Hiring a professional bookkeeper is another necessary cost: miscalculating taxes can lead to hefty penalties and late fees, and it’s important to know how to budget for your quarterly and year-end tax bills.

Selling yourself short.

Getting ahead of yourself and overspending can spell disaster, but so can not thinking big enough. You need to be prepared for success. Imagine that your business thrives and you’re asked to produce more of your product or provide more of your services. Would you be able to? Successful entrepreneurs have a strategy for scaling up when (not if!) their success demands it.

SMART goals written on a blackboard. — *Set Smart goals for your business’s success.*

Setting the wrong goals.

Goal setting is incredibly important, and the types of goals you set can make all of the difference! By following the SMART goal strategy you can formulate goals that are specific, measurable, attainable, realistic, and timely. Having organized goals can help you avoid burnout – you’ll have reasonable expectations and a clear way to meet your goals.

Forgetting your role as entrepreneur and salesman.

It’s easy to dream of being the next Steve Jobs, but in the beginning stages of your new business, you must first work as a salesman. The product? Yourself. Someday you might have the same name recognition as Apple’s CEO, or Amazon’s Jeff Bezos, both of whom can walk up to any table and have a seat. You don’t automatically earn a seat at the table: you first have to successfully pitch yourself to your potential clients or collaborators. Remembering that should encourage you to bring your A-game to all meetings, business or casual.

Ignoring your victories.

Building a business from the ground up is hard work. It means putting in early mornings, late nights, and days away from family and friends. It can be emotionally and physically exhausting. To avoid burnout before you even get your business off the ground, it’s important to acknowledge and celebrate your victories, no matter how small they may seem.

never give up on a pink piece of paper and a red pen next to the words. — *Starting a a business is not easy, but it is important to never give up.*

Considering quitting.

I’ll say it again: entrepreneurship is no walk in the park! Selling yourself and your product, playing the role of manager, salesman, CEO, and innovator all at once, is a lot of pressure! Many businesses don’t survive – but in order to make it, you can’t even begin to entertain the idea of quitting. Steve Jobs famously said, “I’m convinced that about half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance.”

Fearing failure.

Similarly, you can’t act out of a fear of failure. This results in guarded, hesitant actions – and would you invest in someone who didn’t believe in themselves? Fearing failure, while completely understandable, can cause you to second guess yourself and make rash decisions, which could end up damaging your business.

The Long Game

When you’re running your own business, you’re playing the long game. The first few years are survival mode, and unfortunately it doesn’t get much easier after that! Surviving past the first few years is a testimony to your resilience, authenticity, strategy, and skills – and the success of your business will always be worth the effort.

Group Insurance: Plan for Your Company’s Health

When and Why to Get a Group Insurance Plan

So, you’ve got a company, and you’re thriving. As a small employer that’s excellent news! But one thing that’s important for your employees (and thus, important to you) is insurance. Next to an employee’s income, health insurance is the second most important employee benefit. This includes health plans, medical insurance, etc, for both full and part-time workers.

business notebook with planning underlined — *The planning stage comes first before you look into getting insurance.*

One of the biggest factors in the job market out there is insurance, which is paramount to keeping your employees happy. Overall high morale reduces employee turnover, and a stable workforce is one of the greatest predictors of continued success. Guaranteed issue insurance can land your company in a “Best Places to Work” chart. Secure employees equal low turnover.

If you haven’t already, you need to look into a group insurance plan.

But what is it exactly?

What is Group Insurance?

This is a coverage type for a defined group of individuals. Usually, companies will offer health insurance as the primary offering and can supplement to include dental, vision, life or disability insurance.

Group insurance is a leg-up for both the companies and the beneficiaries. Because the companies get a large number of people to cover all at once, they can reduce their rates for said individuals, and the process will go smoothly as they want your business. Wholesale isn’t just for paper towels and bread.

So, in essence, it’s a bigger version of individual health insurance (a single policy) where the company is the individual, and all the employees are separate parts.

When to Acquire?

Technically, if you’re self-employed, you could apply for small group health insurance in some states. For the majority of business owners, you’ll probably be thinking bigger. You can look into this whenever you decide the time is right for your company. Many small businesses realize the benefits of having a group insurance plan, both for the business and for the employees, and opt to look into it sooner than later. .

doctor working with a business person — *The peace of mind that comes from group health insurance is an attractive benefit.*

Remember, the choice is yours to make this step for your business. One differentiation to note is employee number as it puts you in a separate category under the Affordable Care Act. However, this shouldn’t guide your decision.

There really aren’t “milestones” separating you from the uninsured line. When you’re ready to make the investment and are looking for the first time, there is no enrollment period you have to wait for. However, make sure that you start shopping at least 90 days prior to the date you want your insurance plan to be active.

If you feel like you’re wanting to purchase group insurance with a smaller business, one marker would be income. The average annual cost for an employee premium is around $5,000.

So, if you can budget $5,000 per employee per year into your books, it may be well worth looking into.

Why Acquire?

There are many benefits to getting a group health insurance plan:

Your employees will likely be healthier given that they have access to healthcare.

These types of expenses for your business are tax deductible which means putting more money in your pocket.

The aforementioned lower turnover. Happy employees=a stable workplace

As you can see, the benefits will outweigh the costs. You’re going to want to keep your employees happy, and you’ll find support from the government and insurance agencies to smooth the process.

business man giving the thumbs up — *You can do this! You have all the help and support you need.*

Acquiring new insurance and seeking a personalized plan can be difficult and time-consuming. An agent will do the smooth the process, allowing you more time to focus on your business.

EZ.Insure offers you this solution. Your agent will answer any questions you have, compare the plans for you, and even sign you up, free of charge. 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 888-998-2027. EZ.Insure makes the entire process easy, and quick.

Tag: starting a business