When starting a new business, it’s extremely easy to overlook startup insurance. Like any other form of insurance, startup insurance is expensive, and small-business owners have a reputation of avoiding it altogether because of the idea that it isn’t necessary. Although it can be costly, startup insurance can be the deciding factor in the success of your startup.
While there are many different types of business insurance, there are a few that every small-business owner should consider when launching their startup.
General liability insurance
Every small-business owner needs general liability insurance. From a customer falling in your store to your product having a defect and injuring someone, your general liability insurance will have you covered. It can be expensive, ranging from $500 to $3,000 annually, but it will save you so much money in the long run when you are faced with lawsuits from customers.
General liability insurance will cover costs from investigating claims to attorney fees, and may also cover the injured person’s medical expenses — ll of which would be devastatingly expensive if you didn’t have insurance to back you up.
Key man insurance
Key person or key man insurance covers a business in the event that a business partner passes away or is no longer able to perform their duties. This involves purchasing a life-insurance policy for each of the partners in your business, so in the unfortunate event that one of your partners is unable to fulfill his or her role in the business, the coverage will provide the funding necessary to keep the business running.
Key man insurance is geared toward entrepreneurs, small-business owners and startups in order to help keep them running through special circumstances.
Valuable papers insurance
While most businesses don’t keep physical copies of records nowadays, computers come with their share of issues, too. Computer viruses can wipe out tons of information in a matter of seconds, similar to the outcome in the event that a fire breaks out in your store or headquarters. Valuable papers insurance would cover the loss of vital papers as well as the cost to replace the records, but it can’t actually replace the lost documents.
This type of insurance may seem unnecessary at first, but it’s important to keep in mind that while we are living in the digital age, physical documents are not obsolete. It’s important to make sure you keep original documents safe whether or not you have valuable papers insurance.
Takeaway
Creating a startup can have people focusing on a thousand things at once, and that makes it easy for them to dismiss the thought of purchasing any kind of insurance for their businesses. It may seem unnecessary to people, but there are so many different types of insurance out there designed to protect their businesses from failing. As a small-business owner, it’s important to research what type of insurance is best for you and make sure you protect your startup.
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