Starting a new company can be just as challenging as it can be exciting. A successful business operation requires time, effort and money to get off the ground. Once it’s up and running the last thing you want is for an unexpected event to jeopardize your hard work. While there are many different things to keep in mind during the start-up process, insurance should not be overlooked. Insurance can provide you, your property and your employees with a safety net, safeguarding the business from a wide range of unforeseen circumstances.
Although insurance may seem like a costly expense upfront, it can be a financial saving grace down the road. To give you a head start, we’ll be discussing numerous insurance options that every new company should think about. These products will help to protect your assets and ensure long-term success. The coverages we’re looking at effectively protect you against a variety of things. This includes unexpected legal costs, property and equipment damage, injury, sickness, natural disasters and more.
Top Insurance Types For New Businesses to Consider
1.General Liability Coverage
General Liability insurance is extremely valuable for all businesses since it protects against such a wide variety of occurrences. In short, this type of policy protects against third-party bodily injury. In general these injuries could result from either your products, services or operations. It also protects against property damage. For example, if you are a contractor working in someone’s home and you accidentally damage their expensive painting, general liability will have you covered. Additionally, this type of insurance will cover the costs of legal council and potential settlements, if necessary. Above all else, having a general liability plan will raise the credibility of your company, since consumers and partners will know that you’re ready to handle any incident in a professional manner.
2.Property and Casualty Coverage
Property and Casualty insurance, also known as P&C, safeguards your company’s property or assets. This includes buildings, inventory, equipment and more against events like fires, robberies, vandalism and storms. If one of these events is to occur, P&C coverage will cover the costs of repair or replacements. This protection helps make sure that the business recovers, so operations are not down for an extended period of time, and even more money is lost. There is simply nothing that will replace a property and casualty insurance policy. With that said, it is particularly important for business owners whose company relies heavily on physical assets.
3.Workers’ Compensation Coverage
For any business who has employees, workers’ compensation insurance is a must-have. In fact, the majority of states in the United States require most types of business that have workers’ compensation coverage. This protection type is quite simple. Employees with injuries or illness from work-related events, are properly covered. Coverage comes in the form of sufficient medical care and a portion of their lost wages. For example, say one of your employees suffers a back injury while lifting something heavy in your warehouse. This coverage pays for their medical bills. They will also receive a portion of their checks until they are back on their feet.
Workers’ compensation also covers the legal costs that your company would have to pay if the affected employee sues. Lastly, offering workers compensation shows employees that you have their best interests at heart. This helps to instill trust and appreciation. It’s common knowledge that being injure or sick is unfortunate. With that said, the last thing you want for employees is stress related to medical costs or other financial burdens.
Like workers’ compensation coverage, disability also aims to help your employees if they are to become injured or ill. Disability coverage is different though because it protects employees that become sick or injured outside of the workplace. For example, if your employees gets diagnosed with cancer and cannot work for many months, disability coverage can help. The way it does this is by providing them with a portion of their wages. This will allow the employee to cover their living expenses and maintain their overall financial stability. Disability insurance will benefit your company by helping to retain valuable talent. Additionally, disability insurance is legally required in many areas and industries.
5.Cyber Liability Coverage
A lot of good has come out of technology in the past 30 or so years. Unfortunately, more technology also means more cybercrimes. That’s where cyber liability coverage comes in. This type of protection safeguards your business from a variety of occurrences. These events include, cyberattacks and data breaches and the coverage will aid the associated financial loss. For example, if there is a breach in data and the sensitive information of your customers is exposed, cyber insurance will offer protection by covering the costs of the investigation, any legal proceedings, and price of notifying the affected clients. Needless to say, for companies dealing with lots of data and sensitive information, this protection is essential. Without it, you’ll run the risk of financial losses, and your reputation will be at stake.
6.Commercial Auto Coverage
For any organization who uses vehicles for business related purposes such as transportation, deliveries or anything else, commercial auto insurance is a must-have. In fact, in most cases, companies that use vehicles directly in relation to the operations of their business are required by law to have commercial auto coverage (except in Virginia and New Hampshire). In short, this insurance covers vehicle damage, liability related to the company’s vehicle, and any other associated accident costs. An example of this would be if you have a delivery truck that collides with another car. The commercial auto insurance would cover any repairs, medical costs or legal claims that result from the incident.
7.Professional Liability Coverage
While we already discussed general liability insurance, depending on the industry that your company is a part of, you might also want professional liability coverage. Professional liability insurance, also commonly referred to as errors and omissions (E&O) insurance protects businesses against claims of negligence, costly mistakes, or inadequate service. Service-based businesses most commonly adopt this coverage. This includes plumbers, HVAC installers, insurance agents, real estate agents, accountants, attorneys and more. More specifically the coverage will pay for any associated damages or legal fees associated with negligence or a professional error. For example, if you are an accountant, and a client accuses you of giving them financial advice that led to large monetary losses, and decides to sue, this insurance will cover the legal costs or any granted compensation. For service-based companies’ professional liability is a necessity.
8.Product Liability Coverage
Product liability coverage is similar to professional liability, but aimed to help organizations that sell or manufacture products. If your company’s product has a major defect or causes injury to someone, product liability insurance will cover associated costs. When a consumer has a solid case against a company due to a faulty product, these types of lawsuits can be extremely costly, oftentimes costing organizations millions of dollars. To stay ahead of these potential issues, product liability will help you by covering legal fees such as attorney costs, court costs, and settlement payouts. An example is, if your organization manufactures cars, and the steering wheel malfunctions causing a crash, the associated costs are in turn covered by your policy. While the malfunction of a product alone can cause consumers to question a business’s reputation, having a comprehensive product liability plan will help to reinstill some of that trust.
9.Business Interruption Coverage
Business interruption insurance is similar to property and casualty in the sense that it protects against unexpected perils like natural disasters or property damage. The difference though is that it aims to help companies whose operations are affected by one of these accidents for a prolonged period of time. For example, if your company’s headquarters is destroyed by a tornado, and you are forced to shut down the business for multiple months while it is being built back up, this insurance will cover the income that the business would have otherwise generated during the downtime. Many companies shut down forever without a business interruption plan during these types of situations.
It takes a lot of work to start and grow your own business. Protecting your finances, assets and workforce is not only necessary, but imperative to ensure that the success of your business. While the initial start-up of a company is overwhelming, one area that you can’t overlook or take for granted is business insurance. By making an investment into the proper insurance coverages, you can confidently focus your attention on growing the organization, since you won’t have to worry about unforeseen circumstances creating major financial losses.
While every company has its own set of unique needs and concerns, the insurance types that we’ve covered today are some of the most important ones, helping to save countless businesses in the past. By planning for the unexpected and creating a strategy to protect yourself against any and all situations, you will be able to rest easy knowing that your future is secure.
In addition to the coverages discussed, another protection that no business should go without is group health insurance. A comprehensive group health policy will show your employees that you care about their wellbeing, helping to provide them with financial assistance if they are to become ill or injured. If you are thinking about offering an employer-sponsored health plan, your go-to one stop shop is GHQ. At GHQ we have a quick and simple process that will show you all of the best health plans in your area. We also have licensed insurance agents working around the clock to help you if you need it. If you want to take the next step in protecting your workforce, fill out a form today or give us a call at 888-571-0291.