Starting a business is the American dream for many people. But money is always tight, especially in the first few months. Those lean times often persist for years, even though they won’t be as bad or last as long. Nevertheless, many business owners quite rightly look to trim expenses wherever possible. There are plenty of areas to trim, but business insurance is not one of them.
An experienced company like Next Insurance, can help you find the right kind of insurance. The policy should fit your coverage requirements as well as your monthly budget. Importantly, if you run a small startup company, it’s important to work with a company that understands your needs.
General Liability
In the minds of many, GL insurance is synonymous with “business insurance.” Your GL Policy is indeed the foundation for your insurance package. Many landlords will not rent to companies without such policies because such companies put their property at risk. Most GL policies cover tort claims, like slip-and-fall injuries, libel, and slander. Most GL policies do not cover the owner’s own property, vehicle collisions, cybersecurity hacks, and many other incidents.
As a rule, these policies are extremely affordable because their coverage is very limited. Since just one personal injury or libel claim is usually enough to sink a business, GL insurance is an absolute must-have.
Errors & Omissions
E&O, or professional liability insurance, protects your business from claims regarding professional negligence. This insurance is vital for any service business. Many investors will not put their money in uninsured companies, because the risk is simply too great. In other words, if you want your business to grow, you need E&O insurance.
Pay close attention to coverage matters and deductible amounts, because these items significantly impact the policy premium. For example, the E&O policy must provide for a lawyer. However, there are lots of strings attached. The legal fee deductible may be very high or the policy may limit owners to specific attorneys.
Even if your business is 100 percent not at fault, which is unlikely, the legal fees can be tens of thousands of dollars. Most businesses simply do not have these resources. The alternative is rolling over and paying a huge settlement, and that’s no good either.
Workers’ Compensation
Rules vary in this area. Most states only require workers’ compensation insurance if the business has more than a certain number of employees, perhaps fifty or a hundred. Injured workers may file claims based on:
- Trauma injuries, like falls, or
- Occupational diseases, like repetitive stress injuries.
Therefore, even if you run an office-based business, you need workers’ compensation insurance. The penalties for not having the right amount of insurance are often very stiff. Furthermore, state regulators are wise to circumvention schemes, such as only using “independent contractors.” So, don’t try these things.
Cyber Insurance
Because of the direct and indirect costs, most businesses do not reopen after a data breach. The direct costs include fines, settlement costs, and legal fees. The indirect costs include loss of customer goodwill and lost consumer confidence.
Making matters worse, there is no single profile of a hacker. Many want money. Many others want to embarrass your organization, make a political point, or simply prove to themselves that they can get past your security.
Because there is so much at stake, and because attacks are so unpredictable, your business needs cyber liability insurance. It works a lot like E&O insurance in terms of covering legal fees and so on. Cyber insurance can literally be your business’ one lifeline in an emergency.
Takes some time out to consider the options and make the right choices concerning your business insurance needs