The costs of litigation are becoming increasingly expensive. According to a US survey, nine in ten businesses deal with litigation at some point. The average company also has at least 37 cases pending against it. Small firms spend more than $100 billion every year on litigation fees, and over 40% of small business owners said they’d been either involved in or threatened with a lawsuit. These statistics reflect the criticality of small company start-up insurance. Various insurance plans are available to assist small businesses in protecting themselves against these hazards and threats. The only hurdle now is deciding what kind of start-up insurance you will need. This can be based on your budget or whether they are required by law. Let’s take a look at some of the options and their ramifications for your start-up business.
General Liability Insurance
General liability insurance or “business liability insurance” helps protect start-ups against claims involving injuries. It also covers property damage and the cost of defending your business legally. Liability coverage is also available under some general liability plans for libel and slander. In many states, this form of insurance is required for businesses. In reality, a lot of the states will not issue a business license until general liability insurance is secured. This means you’ll need to obtain this start-up insurance coverage before conducting business with the public.
Commercial Property Insurance
This coverage protects the property you use to conduct business. This includes not just the building itself but also all of the valuable possessions and equipment it contains. If any of the insured properties are stolen, damaged, or destroyed in a fire, this insurance takes effect. Small business owners are also protected by most insurance policies against natural disasters. In the United States last year, there was a mind-boggling 7.2 million property crimes. Over one million blazes broke out during 2015, according to statistics from the Centre for Strategic and International Studies. Several of these fires affected business and their operations. These stats should be enough to show you how important business property insurance is. Any of these risks may leave your company penniless.
Cybercrime Liability Coverage
Cybercriminals target companies and businesses regardless of how big they are. Unfortunately, you and your company aren’t the only ones who may be affected. Cybercriminals who use ransomware as a tool to extort cash from individuals and businesses may also steal your consumers’ personal and financial data. If this happens, you might be held responsible for significant damages. According to one survey, 60% of cybercrime company targets had to shut down. The greatest approach to avoid these assaults is, without a doubt, to purchase anti-cybercrime solutions. Adding cybercrime liability coverage to your new business insurance helps you manage any potential lawsuits.
Business Owner’s Policy
A BOP (business owner’s policy) covers all of the previously listed coverages. This gives it a leg up on the competition in terms of key coverage options, making it a “one-stop” shop for everything your start-up needs. It also protects you against insured perils’ income losses. An owner’s policy for retail food businesses covers the cost of equipment failure. It also includes food supplies, such as spoilage, which are regarded as “commercial property.” Consider buying a BOP if you’re in the food industry. It provides more coverage than general liability insurance.
Workers’ compensation is a legal obligation in almost every state of the United States. This is required when the firm has only one employee. Texas is the only state that does not have a workers’ compensation regulation, with the exception of the construction industry. Worker’s compensation is must-have for every business, even the ones in Texas. Your employees will be covered for medical expenses and lost earnings following an accident. This insurance will also cover the cost of rehabilitation and death benefits.
Employers’ Liability Insurance
Workers’ compensation is important, but it does not cover all injuries and illnesses. An injured or sick employee might file a lawsuit against an employer for punitive damages like lawsuits. Employers’ liability insurance protects businesses from financial risks that are outside of their control. That’s why it’s sometimes referred to as the “part 2” of workers’ comp insurance. It covers several other work-related injuries and illnesses that workers’ compensation does not. You may not be able to cover the costs if one of your staff is injured at work. If they require continuous treatment, their workers’ compensation may not cover it. If your employee feels that their ailment is partly due to your carelessness, they may consider bringing a lawsuit against you. In this situation, your business liability insurance will help.
Insure Your Start-Up Business Today!
That is all there is to know about small business start-up insurance coverage. You should implement these measures not only to defend yourself and your company from damages and litigation but also to assist your staff during their most fragile moments. Before you even begin your company, be sure to investigate each variant of start-up insurance coverage! You’ll soon discover which ones you truly need for your small company. Contact Insurance Navy today for the best value and coverage for your business.