An emergency can happen when you least expect it, and in business, the right insurance can help save the owner from significant financial loss. This is why it’s imperative that startups have a business insurance plan to help them make payments against legal liabilities and any claims against the company.
However, a majority of small businesses fail to research and carry the necessary insurance to protect them from immeasurable risk.
This not only leaves their business exposed, but their customers and clients as well.
The main reason for not carrying the right business insurance policy- let alone any? Lack of previous experience and knowledge.
Let’s take a look at some important types of insurance and how you can choose the right plan for your business.
Types of Small Business Insurance
The type of business insurance you need depends on the industry you occupy and it’s overall size.
General Liability Insurance
General liability insurance is vital for startups looking to scale. It protects a business against legal claims that require huge settlement payments, such as:
- Bodily injury to employees or customers
- Owner and employee life insurance payouts
- Third-party property damage
Business owners leasing a property or operating from a personally owned location must insure their property. Property insurance also covers:
- Company Owned Equipment
In the instance any of these assets are damaged in theft, fire, or natural disaster, the insurance covers the damage costs so business owners don’t have to pay for the resulting destruction.
Cyber Liability Insurance
Cyber attacks and data breaches are among the most common threats every organization faces today. If your business manages client data, even if you are strictly maintaining industry-specific regulations, you are still at risk.
If your security system is breached and hackers leak your client’s confidential data, your business reputation will be on the line. But cyber liability insurance minimizes the damage if a hacker breaches your data system.
Product Liability Insurance
Even though you heavily invest into product quality as a startup, products can still malfunction. Therefore, it is better to take product liability insurance. If your product malfunctions or doesn’t perform according to user expectations, customers might press charges and sue the company- especially if the malfunction results in injury.
If your business has a policy of issuing vehicles to employees, it’s crucial to insure these as soon as possible. Failure to do so and the company may face liability if an accident occurs and there’s damage.
Workers Compensation Insurance
Workers’ compensation insurance will provide you with resources to offer your employees multiple benefits such as medical treatments and disability allowances. Even if you think your work environment is perfectly safe and your employees have no danger of injury, accidents can still happen.
Remember, if you take care of employees’ well-being, they will stay longer and work harder.
Home-based Business Insurance
Many startups operate on a small level and use the founder’s home as the primary base in the beginning. Particularly during the pandemic, it has become even more important to secure your at-home work environment.
Unfortunately, if there is a business-related problem, the home insurance will not cover it. To provide the home-based business with the required safety net, startups should sign up for additional insurance policies.
Important factors to consider when choosing an insurance company
As a business owner, you might not know the key qualities to look for in an insurance company before seeking out their services. Make sure not to make the common mistake of doing it on your own, and seek out advice from those who know the industry. Some important factors to look for include:
Instead of going after insurance companies with the best deals, choose one that is well known for its quality of service.
We recommend opting for the insurance company that provides you the flexibility of changing your insurance plan as your business grows. Therefore, as your business starts to grow, you will have to increase coverage to meet your company’s needs.
- Business requirements
Insurance companies offer multiple types of business insurance policies across different industries, so you need to check which approach is better for your organization before choosing a plan. The insurance plan must cover all the specific requirements of your business and meet industry regulations.
- Trustworthy agent
A good insurance agent or broker is invested in protecting your business, as opposed to just selling their insurance. With their guidance, you have a higher chance of finding and obtaining a good plan for your business.
Business insurance protects your business from disaster and protects from financial loss. Significant financial loss can have a devastating impact on startups – especially because it may shut down your business for good.
While finding a good business insurance plan can be challenging, a good business planner can guide you through the best plans for your business by assessing your industry and your company size, as well as the rate you expect to grow.
Our team experts here at MCDA CCG can be that trusted partner, one who uses our industry-wide knowledge and expertise to shop around for the best insurance for your company- reinforcing your business for 2022.
Call our office – headquartered in Placentia, Orange County, California – to hear about our year end discounts!
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