It can be tricky to shop for the best insurance policies for a startup. Most insurance brokers will not be able to provide you with the coverage that fits your needs. As your company raises money, hires more employees, and brings in more customers it is important to be covered. I suggest shopping at Embroker which specializes in insurance for startups.
The Basics Insurance Policies:
General Liability: provides financial protection for your business in the event of lawsuits, claims, or settlements. These may arise as the result of injuries or property damage connected with your business, or even non-physical acts like slander or libel. You need this.
Property: covers your business’ physical assets including buildings and inventory. This will cover all your business’ assets, whether they are leased or owned. This should also include personal property belonging to others that are in your company’s care.
Workers Compensation: aka workman’s comp or workers’ comp, gives your employees benefits if they get a work-related injury or illness. This is required in most states.
E&O (Errors and Omissions) insurance will protect your company and employees against claims made by clients for unsatisfactory work, mistakes, or against a deliverable that you were not able to deliver. You should have this if you bill clients for services.
D&O (Directors and Officers) protects the company’s directors and officers against claims of wrongful acts, management misconduct, theft, unfair competition, fraud, and more. This protects you against claims that come from your investors, employees, clients, vendors, or competitors. Investors will require that you have this.
Cyber Liability: covers a data breach involving sensitive customer information, such as Social Security numbers, credit card numbers, account numbers, driver’s license numbers, and health records.
The cost of each policy depends on many different factors. You can expect very basic coverage to start at a few hundred dollars a year. As you grow, you will be paying thousands a year.