Startup Insurance: A Complete Guide To Insurance For Your New Business
Business insurance is a startup expense that many entrepreneurs don't consider. Learn what types of business insurance you need and how insurance will benefit your startup.
Business insurance may not be at the top of your to-do list when you’re bringing a startup to life. Should it be? How important is startup insurance? What types of business insurance do you need? And how much will it cost you?
Startup business insurance is important enough to move up your to-do list. Fortunately, it’s neither hard nor expensive to get the coverage your new small business needs.
In this post, we’ll go over the most essential types of business insurance for startups and help you find the right insurance provider to deliver the coverage your startup needs.
Table of Contents
What Is Startup Business Insurance?
Startup business insurance is not a single type of insurance policy. Instead, it’s a personalized bundle of policies that meet your needs and your budget at this moment. As your business grows, you may need to add or increase coverage, increasing both your protection and the price tag that comes with it.
There are a couple of insurance policies that nearly every business should consider carrying. We’ll discuss those in the next section and talk about additional policies that your business may be legally required to carry, as well as some that are nice to have if your budget allows.
What Type Of Insurance Do I Need For A Startup?
Business insurance can seem like an intimidating topic. In fact, that’s one of the most common reasons why business owners don’t get coverage. To help you feel more comfortable, we’ve broken down the types of business insurance into three categories:
How To Tell If You Need Startup Insurance For Your New Business
Business insurance protects your startup against damage, liability claims, and property loss. Although no one enjoys paying the insurance bill, when you consider the benefits that business insurance delivers, it’s hard to think of any business that doesn’t need insurance.
If you’re still not clear on what business insurance does and how your startup can benefit, our beginner’s guide to business insurance may answer your questions and help you decide what, if any, coverage you want for your startup.
Remember that if you’re working and building your business from home, you may need home-based business insurance to ensure full protection. You can’t rely on your homeowner’s policy to cover your business assets and meet all your startup’s insurance needs.
How Much Does Startup Insurance Cost?
Startup insurance is just one of many expenses entrepreneurs must juggle. Insurance is a legitimate startup expense, along with the cost of buying equipment, furnishings, and inventory; creating a website and marketing your products; and paying utilities and taxes. You definitely should pencil in the cost of insurance when you write your business plan.
The amount you can expect to pay for business insurance varies widely. Some factors that influence the costs are out of your control, such as your business location, your industry, and certain inherent risk factors.
You can take steps to lower business insurance costs, too. Bundling essential policies, limiting known risk factors, and setting a higher deductible are three examples of ways you can keep costs down.
Another important strategy for keeping insurance costs down is to shop around and compare prices and coverage options. If you do this, make sure that you understand how to read an insurance quote. Focus on key terms such as qualifying events, exclusions, policy limits, and deductibles to make sure you’re getting the coverage you need at the best price.
The Bottom Line On Business Insurance For Startups
The best insurance for small business gives you the protection your startup needs at a price you can afford.
Startup insurance is a necessary cost. In fact, whether your business is new or established, business insurance will protect your assets and your future.
Speaking of assets, have you already decided to open a business bank account? If you’re still investigating your options, take a look at our list of the best business bank accounts to find a good match.
If you’re running your startup as a sole proprietor, you might find a better match in our list of the best business bank accounts for freelancers and the self-employed. These business bank accounts charge low or no fees and work with small business owners to deliver the services you need as your business grows.