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

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

Unemployment Compensation Insurance

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

Disability Insurance (Required in Some States)

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

General Liability Insurance

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

Commercial Property Insurance

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

Professional Liability Insurance

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

Product Liability Insurance

1. 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.
2. This is not required insurance.
3. The cost will be about .25￠ for every $100 in retail sales.

Employment Practices Liability Insurance

1. This coverage protects you in cases of sexual harassment lawsuits or otherwise.
2. This insurance is not required by law
3. 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

1. This insurance type covers your business in the event that the business owner or another key personnel member dies or becomes disabled.
2. This is not required insurance.
3. 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.