All businesses need insurance. While some of these are compulsory, others are optional but important. A proper business insurance coverage is critical for a startup to succeed. There might be various problems that you might have to tackle as an owner for a small startup or business. With the right insurance coverage, you can make sure that you are able to mitigate any and all pitfalls, it is important to have good insurance coverage. To be able to choose the right kinds of insurance for your startup, it is important to first understand the various types of insurance. These are a few insurance types that you might consider based on your business:
General liabilities insurance
The general liabilities insurance covers all kinds of bodily injury as well as any property damage caused by your company. It covers actions by your team outside of the office/ business space. If your competitor sues you for defamation or copyright/ patent infringement, the general liabilities insurance covers that too. E.g. If your sales representative spills hot coffee on a client while at a meeting, causing severe burns-this type of insurance will definitely come in handy.
Worker’s compensation/ disability insurance
Worker’s compensation covers injuries that employees might suffer from, while at work. Similarly, disability insurance provides a source of income for employees disabled at work. Workers compensation is not just applicable for factories or manufacturing plants, which requires manual work but also for service based industries like software coding. E.g. If a programmer damages his wrist, by coding for long hours, because of constantly using the keyboard. There might be a claim and then you need an insurance payout.
Cyber liability insurance
This insurance covers liability for data restoration if you have somehow managed to lose or delete third party data that is crucial for conducting the business. Lawsuits arising out of the breach or theft of third party data are also covered under this insurance. This type of insurance is essential for startups that intend to provide cloud data services. If there is a loss of client data on the server you should be prepared for claims.
Errors and omissions insurance
This kind of insurance helps to cover any claims against you and your company in the event of any financial loss that your product or service might cause. This is again an important insurance policy for tech startups involved in creating software- certain software codes can bring down entire technical infrastructures. You will in the case have a lot of claims that you might need to settle and therefore you will need an insurance policy. Insurance is a very tricky field and there are various kinds of insurance, therefore it is always good to consult a trusted insurance agent to finalise what your startup actually needs. Make sure you insure your business/ startup so that you don’t have to face unnecessary hassles that might surface. When it comes to insurance, many insurers provide tailored packages for your startups but it is important that you insure only what you need to insure.