Forging a successful startup from nothing isn’t easy, yet countless entrepreneurs hit the ground running each year in pursuit of a commercial dream that they hope to turn into a reality. While many of these startups inevitably fail, those that do succeed usually do so because they had some financial security in the form of insurance, which more entrepreneurs are coming to view as an essential part of doing business.
Launching your next startup without extensive insurance coverage can be a disastrous mistake that will haunt you in the long run. Here are the 5 types of insurance for your startup that you should consider before you go public, and how you can go about securing coverage in an affordable fashion.
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1. Cyber insurance is a growing industry
One of the hottest areas in the field of insurance right now is cyber insurance, or an insurance regime designed to cover a business’ digital operations from internet-based risks like hacks and data breaches. In this day and age, startups often succeed based on how successfully they woo over a base of core users, and there’s nothing that modern users are more concerned about than digital privacy and IT security. With data breaches regularly grabbing international headlines and fears of surveillance abounding, it only makes sense to give your business a positive reputation by investing heavily in cyber insurance.
Major coverage providers like Nationwide are now beginning to talk about cyber insurance, too, so don’t make the terrible mistake of thinking this is some niche area with only a few providers to survey. As time goes on, cyber insurance will only grow more crucial as the economy becomes increasingly reliant on digital technology, rendering your business more vulnerable to data breaches and IT meltdowns.
2. You should consider insuring your employee’s devices
Many modern businesses have realized that it’s not worthwhile to invest in IT equipment that your employees will barely understand or want to use. That’s why so many modern startups are allowing workers to supply their own IT equipment and digital devices, oftentimes supplying their workers with a cash stipend that they can use to purchase whichever device most suits their tastes. Rather than allowing your employees to purchase their own devices and do whatever they want with them, however, you should seriously consider insuring employee’s devices to help prevent any productivity crises in the event that something breaks down.
Electronic device insurance protection is increasingly popular amongst businesses that need their digital devices to be up and running 24/7 in order to turn a profit. Rather than allowing your employees to languish without coverage for their most precious devices, you should ensure the laptops and smartphones that help your business operate even if you didn’t supply them yourself.
3. Providing health insurance is crucial
A startup that doesn’t care about the wellbeing of its employees is a startup that’s going to crash and burn before long in the open marketplace. This is because successful businesses have long since realized that profitability can’t come at the expense of everyday workers, and that such things as healthcare insurance have evolved from a luxury to a necessary part of modern life. It can be easy to view health insurance as an expensive afterthought, but in reality paying for employee health insurance can provide your startup with immense benefits that end up paying off in the long run.
4. Have a worker’s compensation plan
Not having a good worker’s comp plan is a surefire way to ensure that your startup finds it impossible to attract and retain the top talent available in your industry. Startups usually fail if they rely on a lackluster workforce, so having a comprehensive worker’s compensation plan in place for when things inevitably go wrong is important and will save you from having to assemble one in a rush after a crisis occurs. This could be backed up with good commercial insurance, which covers you in case you had an issue with workers.
Don’t think you can avoid worker’s comp packages just because you supply employee healthcare – they’re fundamentally different things and can’t be swapped out on a whim. Having a robust worker’s compensation plan in place will give your employees peace of mind and help your managers and business owner know what to do if an employee is injured on company grounds.
5. Startups need error and omissions coverage
Every startup feels as if they’re a gift to the world, but in reality, many startups make mistakes that end up forcing them to confront an expensive lawsuit. In the event that your company gets sued, having error and omissions coverage can be the difference between successfully fending off a lawsuit and facing bankruptcy after losing in court.
Even the smallest startups still need E&O policies, so don’t think that your fresh status on the market renders you secure from a lawsuit. Before long, you’ll come to view error and omissions coverage as an essential part of leading your startup towards profitable success.