Startup founders have a lot on their plates, and insurance is likely the last thing on your mind. When you’re trying to get your business the right coverage, the world of business insurance can seem daunting. To help it be a little bit easier for you, we’re answering four of your most frequently asked questions about insurance for startups.
As you launch and grow your business there are several different milestones that will often require purchasing insurance. Here are some examples:
Moving into an office: Once you sign a lease you’ll likely need to purchase General Liability and Commercial Property insurance to protect your business against third-party bodily injury and property damage.
Hiring your first employees: As a general rule, as soon as you add someone to your payroll you’ll likely be required to purchase Workers Compensation.
Signing your first client: Third-party companies, especially large ones, may require you to have certain insurance policies in place before signing off on a deal. This could include:
Expanding your customer base: Cyber Liability is a necessity if you handle or store sensitive client information, such as credit card numbers. This policy will help your business recover in the case of a data breach.
New Funding or adding board members: It’s likely that your investors and board members will require the company to carry Directors and Officers (D&O) insurance, which will protect their personal assets in the event of a lawsuit. Generally, D&O insurance is needed within 60 to 90 days after securing an investment
Yes, you’ll most likely still need insurance. If you have a website that is generating revenue you’ll likely need General Liability and Technology Errors and Omissions (E&O). Keep in mind that even if you operate out of your home, you might still need Commercial Property insurance because most homeowner’s or renter’s policies won’t cover business assets.
Yes, some industries are considered to be more high-risk than others. Fintechs, BioTechs, Shared Economy, Micro-Mobility, Cannabis, and Crypto and Blockchain startups might see higher premiums as a result.
With CoverStartups, which specializes in insurance for startups, the process is as simple as filling out a few questions in our online application about the industry you work in, the number of employees you have, and your annual revenue. You may be able to access a range of quotes immediately, but if not, our advisors will reach out to you to discuss the next steps to provide you with the best coverage.
It’s easy to look at insurance as just another requirement you need to fulfill, but it’s an essential investment in the future of your startup. Insurance for startups can give you the peace of mind you need to focus on growing your business.
To learn more about insurance for startups, download our free eBook.