A Breakdown of Insurance Coverage for Your Business Startup

For new business owners, the list of things to do seems endless. Don’t give up. You will cross everything off that list and your new venture will open. One key to your success is insurance. You cannot run the risk of damages incurred without proper coverage. If you aren’t protected, you may lose everything you’ve worked so hard to achieve. Depending on what you do defines what insurance you’ll need. Here’s a quick breakdown to help you sift through the umbrella nightmare. Protect yourself and what you worked really hard to get.


Whether you operate your business out of your home or an external location, you must protect the property in which you run your entity. Depending on where you are located in the United States, you may face everything from earthquake and fire dangers to hurricane and floods. You don’t want anything to end your dream, so make certain your business’ property and equipment is insured fully. Sometimes insurance policies only include part of the property. Make sure that you analyze everything that is listed and opt for full coverage as it is much more beneficial than alternatives.


In business, you will find two common types of liability coverage: general and professional. General liability insurance protects you against things such as slips and falls; professional liability protects those whose work could result in a future claim. Entrepreneur also calls this coverage errors and omissions insurance, and if you’re a CPA for example, you may need protection against your own errors. Basically, whenever your job can lead to disastrous results for your clients as you make an error, liability insurance is necessary. At the same time, having liability insurance is usually seen as a sign of true professionalism. You can actually gain more clients by simply having such a policy in place.

Workers’ Compensation

Workers’ compensation insurance requirements depend on where you operate your business. Seattle business insurance requirements must comply with Washington state workers’ compensation laws, whereas Los Angeles business coverage must comply with California laws. Generally, you must carry workers’ compensation coverage for high-risk positions or if you employ a certain number of employees. Similarly with the liability example, having worker’ compensation insurance helps you to get more business simply because you attract better workers. The best talent will always look for extras like compensation in the event they get ill or something bad happens on the job.

Business Interruption

This is a less-known option that is rarely considered simply because business owners do not know it exists. What would you do if you had to close your business’ doors for a few days, weeks, or months? Can you afford to be out of operation that long? Chances are you can’t, which is why the many state insurance commissions recommend getting your hands on business interruption coverage. This protects your business in the event you must cease operations due to unforeseen circumstances.


You know that if you own a fleet of business vehicles, they must be insured properly. Many small business owners make one crucial mistake, however, and that is driving their personal vehicles for business purposes without proper coverage. When you’re just starting out, you make deliveries and run errands yourself. Insure your vehicle to cover it in the event of an accident while business driving. Based on local laws, transferring ownership of the vehicle from you as an individual t the business can bring in extra benefits you will want to take advantage of.

Product Liability

Finally, if you offer products to your customers that run the risk of harming them in any way, you must secure product liability insurance coverage. Even if you’re in food service, you must protect yourself against lawsuits. The McDonald’s hot coffee incident has earned a reputation as a frivolous tort action, but the facts say otherwise and the company should have been held more liable than it was.

Don’t put your business at risk by failing to insure yourself against injury or death from your product. In fact, don’t put your new business at risk for any disaster. Make certain to include an insurance budget line in your business startup financials and account for all coverage you might need. When properly protected you can run your business with the peace of mind you need to turn it into a Fortune 500 company. See you at the top!

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