You've worked hard to come up with a business concept and you have everything in place to start...well, almost everything. One of the most important steps to starting your business that often gets overlooked is your insurance. Insurance is a business decision - you are deciding what you can afford and how much you can afford to risk without insurance. In my opinion, here are the top five insurance products that you need to provide your business with a solid level of protection.
General liability insurance. While #2-#5 are debatable for their order, this is by far the #1 coverage that every business should have from Day One. General Liability insurance is like a safety net for your business in case someone gets injured or their property is damaged as a result of your business activities. Think of a slip and fall, or consulting with a client at their home and you accidentally break an expensive vase.
Commercial property insurance. This insurance covers your business's stuff from damage or theft. It can also cover the cost of lost business income if your stuff is damaged and you can't operate your business.
Workers' comp insurance. If you have employees or 1099s (independent contractors), then you need this coverage. This insurance is required by law in most states if you have any employees and it is there to cover the cost of medical expenses and lost wages for employees who get injured or sick on the job. In many states, the independent contractor (1099) will be entitled to the same workers compensation benefits that a W-2 employee is if that 1099 worker is injured while working for you and under your direction. If you don't have workers compensation insurance, they could file a claim against your business for their treatment and compensation.
Errors and omissions insurance. This insurance protects your business in case you make a mistake in your work that causes financial harm to a client or a claim is made alleging breach of contract. These claims don't happen often, but are very expensive when they do because the claim is filed from the start in a court of law.
Cybersecurity insurance. This insurance protects your business from financial losses caused by cyberattacks, such as data breaches and ransomware attacks. Don't believe that you're too small to be vulnerable - cyber hackers start with small companies to develop their skills before moving on to the big companies.
The best way to make sure that you have the appropriate coverage is to find an agent that you feel comfortable with, and then have a discussion about what your current operations are as well as your future plans.