There are over a million small businesses in Canada that have employees.
If you're one of the many looking to break away from your 9 am - 5 pm job in favor of running your own company, congratulations! Being your own boss takes a lot of courage and a tremendous amount of discipline.
As it turns out, being your own boss also takes a lot of insurance coverage.
Something as small as a website data breach could cost the average company 3.9 million dollars in damages.
Combine that risk with all of the other risks you face as a startup, and the picture becomes clear:
Quality, comprehensive coverage is key to building your organization on a strong foundation.
Below, our team breaks down different startup insurance products new companies should look into getting.
1. Product Liability Insurance
Is your startup company in the business of selling products as opposed to services? If so, one of the first kinds of startup insurance you will want to acquire is product liability insurance.
With product liability insurance, you will protect yourself from any damages that result from harm caused by your products.
A child choking on a product you shipped. Your product malfunctioning and causing property damage. Your product line being faulty.
Product liability insurance would protect you from financial fallout in all of the above instances.
2. Commercial General Liability Insurance
Whether you're in the business of selling products or services, general liability insurance should be on your docket of insurance products to pick up.
Armed with general liability insurance, you protect your startup company from customers who come onto your property, have an accident, and sue you for damages. You will also get protected from claims made by building owners.
Commercial general liability insurance is the most commonly recommended type of startup insurance.
3. Worker's Compensation
In order to protect yourself from costly claims that result from your employees getting injured on the job, you're going to want to get worker's compensation insurance.
With a worker's compensation policy in place, employees won't need to file suit against you for lost wages due to workplace accidents. You may also be able to mitigate the damage that results from emotional-distress related suits that may arise from accidents.
Talk to legal counsel to find out what your obligations are under worker's compensation laws. Be sure that you're carrying coverage that at the very least has you in compliance with minimum requirements.
4. Professional Liability Insurance
If you're a service-based business, professional liability insurance is what you'd opt for as opposed to product liability insurance.
Professional liability insurance is a favorite among graphic designers, web developers, accountants, writers, and similar professions. It insulates policyholders from malpractice lawsuits that result from omissions and errors.
5. Commercial Property Insurance
Every business runs on great ideas but leverages physical things to bring those ideas to fruition.
Factory equipment. Computers. Office cubicles.
When it comes to where your business operates and the equipment you use, you'll want commercial property insurance to protect it all.
With commercial property insurance, your valuables will get replaced in the event of a fire, natural disaster or theft.
Remember, all it takes is one faulty wire and a resulting fire to potentially eat thousands of dollars of your startup's assets. Don't fall prey to that possibility and protect yourself with property insurance.
6. Commercial Auto Insurance
A common mistake that startups make is that they leverage their personal vehicle for business purposes and expect that they're covered under their personal auto insurance policy.
In truth, many auto insurance policies will deny claims if they find out that your vehicle was being operated with commercial intent. For that reason, you'll want to opt into a commercial auto insurance policy immediately.
When you add commercial auto insurance to your startup insurance list of products, you and your employees will be covered in the event of an accident. Your commercial vehicle equipment will also be protected from theft.
7. Data Breach Insurance
As more businesses rely on the internet to run their organizations, more hackers are attempting to steal valuable data.
As we mentioned in this article's intro, a single data breach could cost companies millions of dollars.
To protect yourself from the fallout of a data breach, data breach insurance is the way to go.
Data breach insurance goes by many names. Some include online security insurance, cybersecurity insurance, and more. No matter what name it goes by, you'll want to make sure that your policy offers comprehensive coverage for lawsuits and damages caused by a cyber attack.
Remember, even big companies like Best Buy have fallen prey to online attackers. That means your startup, given its less sophisticated cyber protection measures, could be at an even greater risk.
8. Business Interruption Insurance
If a natural disaster occurs and people can't make it to your business until road repairs are done, what will you do?
For many businesses, being closed for just a day could mean being non-profitable for the month. To protect against costly shutdowns, business interruption insurance is an excellent solution.
When covered events take place, interruption insurance will write you checks every day your company is closed. With that kind of support, you never need to worry about the implications of shutting down due to unforeseen circumstances.
Wrapping Up Startup Insurance: A Guide to the Different Types of Small Business Coverage
We've gone over 8 different startup insurance products you should consider getting.
While insurance coverage may seem like a cumbersome expense, it could be the difference between you riding out adversity and you going bankrupt when it occurs.
Need help finding and comparing the best rates on startup insurance products? Use our tools on Insurdinary today or contact us for more information on what business insurance is best for you.