Essential Insurance Policies Your Startup Needs

Businessmen in rainU.S. unemployment sits at almost nine percent, reports Gallup. If you're one of the the millions of Americans without a job, starting your own business could be a viable option that will provide an income and use your professional talents and skills. The costs of starting a business, however, can feel overwhelming, and you need to look for ways to cut costs. Insurance is one area where you might look to save, but decide which types of affordable coverage you really need for your startup before you start cutting.

General Liability Insurance

Say a customer visits your store, trips over a display, sustains an injury, and sues you. Do you have assets to pay the associated medical bills and legal fees? The Small Business Administration strongly recommends general liability insurance for all business owners. It covers medical and legal expenses, including those associated with slander, libel, lawsuits, or settlement cases.

Product Liability Insurance

If the widget your company sells has a defect, and your customers are suing you and the manufacturer, product liability insurance covers your costs. The cost of product liability insurance depends on the type of product you sell, so your rates will be higher for selling appliances than clothing. Also, don't buy product liability insurance until you make sure it's not included in your general liability policy.

Professional Liability Insurance

Also called errors and omissions insurance, professional liability is essential if your business could be sued for malpractice or negligence, or if your state mandates the coverage for your business. Check with your insurance agent to be sure, but keep in mind that a professional liability insurance policy is a wise decision if you're working in financial services, construction, transportation, public service, nonprofit, or medical fields.

Commercial Property Insurance

Unpredictable natural disasters occur in every area of the country, so you'll want prepare by packing a Red Cross certified emergency kit and buying commercial property insurance. It covers damages and helps you recovery quickly. In addition to repairing your building and replacing inventory and office equipment, your policy could cover lost income and business interruption. When shopping for a commercial property policy, decide between all-risk, which covers a variety of general perils and incidents, and peril-specific, which is better suited for areas of high risk and covers only the perils listed in the policy.

Tips for Saving Money

Licensed insurance agents, such as the ones at The Hartford, provide the professional advice you need as you make insurance purchases for your new business. They advise you on the policies you need, ensure you're not purchasing duplicate policies, find the best rates, and bundle multiple policies if possible. They also help you keep costs down. Sometimes, you save money in the long run by paying a little more for customer service, accident forgiveness and a lower deductible. Likewise, always read the policy's fine print before you make a final purchase, and ask your insurance specialist as many questions as possible until you're positive you have the affordable and correct insurance your startup needs.

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Gary

CEO at 3Bug Media
Gary Shouldis is the founder of 3Bug Media, a web marketing company that helps businesses create 360 Marketing Strategies to dominate their market. His blog is read by over 20 thousand small business owners a month and has been featured in the N.Y. Times Small Business, Business Insider and Yahoo Small Business.
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