As a startup owner and entrepreneur, you’ve invested a lot of time and resources into getting your business off the ground. After exhausting all that effort and money, the last thing you want is for claims and liabilities to be filed against your company. Not only would it take your focus away from your business, but it would also end up costing you financially. Even if you aren’t at fault, it’s a burden you and your business don’t need. To protect yourself from claims and liabilities, you should first look at what your business does, and what chance there is of directly or indirectly harming workers and customers. The following situations are common in any type of business:
Once you’ve determined what the risks are, you can take these steps as you see fit:
Even if your startup operates out of an office or storefront, and the risk of injury or illness is low, you still need general liability insurance. This will protect you in many situations. For example, if a customer slips and falls in your store, they can sue you. You may be completely innocent, but the lawyer fees you’ll spend defending yourself can add up to thousands of dollars. General liability insurance will cover your defense. Coverage isn’t expensive if your business doesn’t deal in anything potentially dangerous. A clothing store would pay less than a car repair shop, for instance. Accidents can happen anywhere, however, and that’s why general liability insurance is important.
Workers’ compensation pays out money when an employee gets accidentally injured on the job. Whether you were at fault or not, if it occurs while they are working, an employee can file for workers’ comp. All companies with employees in the United States, except for those located in Texas, are required to provide workers’ comp.
Professional liability insurance will cover anybody who has a certain skill and uses it for his or her business, such as a hairdresser, photographer, tax preparer or wedding planner. It will help pay for civil damages and negligence costs if a customer files a claim.For example, if a photographer took pictures of a wedding and then accidentally erased all of them, the bride and groom could sue for negligence, even though they weren’t physically harmed. Professional liability insurance would step in and provide you with a defense and pay damages to the other party.
You own the property you operate out of, and/or you have a bunch of equipment and belongings in your space. If your place burns down, if you have a pipe burst that causes water damage, or other damage occurs to your property, you can file for business property insurance to help cover the costs of replacing it.As an entrepreneur, you need to think ahead. If anything goes wrong, it’s all going to fall on you. You’ve gone so far with your business, and you don’t want to lose it because of claims and liabilities. By taking preventative measures, you can protect your business and ensure that it’s going to be successful for years to come.
Ryan Hanley is the Vice President of Marketing at TrustedChoice.com and the Managing Editor of Agency Nation. He is also a speaker, podcaster and author of the Amazon best-seller, "Content Warfare." Ryan has over 12 years of insurance expertise and blogs frequently to help consumers understand complicated insurance topics.