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Words of wisdom from our business insurance experts.

8 Tips To Find Business Insurance for Startups

5 min read
November 1, 2022
8 Tips To Find Business Insurance for Startups

As the owner of a startup, there are a variety of risks you need to manage as soon as possible. Insurance coverage is essential for protecting you against the costs associated with liability claims and property damage.

Though every business owner hopes these types of situations will never arise, it’s crucial — and even legally required — to maintain adequate coverage to protect the business.

Refer to our helpful guide to complete this crucial step of starting a company.

Tips for Finding Business Insurance for Startups

Finding the right business insurance can be challenging, especially if this is your first time purchasing insurance for a business. Business policies are different from personal insurance. To make the task easier, here are eight user-friendly tips to help you find the ideal coverage for your needs.

1. Take a Hard Look at Your Risks

The type of industry you’re in, the size of your business and your location all help determine the unique risks your business faces. The top risks for your business may be much different than the top risks faced by the company down the street.

To make sure you get the right business insurance for startups, you’ll need to brainstorm your most potent risks and the type of insurance you’ll need to protect you from those risks. For example, if your employees drive corporate vehicles for business purposes, you’ll need to make sure you have a good commercial auto insurance policy that covers every business vehicle.

2. Know the Different Types of Business Insurance

Before you can select the right insurance coverage for your new business, you need to understand the different types of business insurance for startups. Here are a few of the different types of policies available:

  • Professional liability insurance: This covers legal defense costs and claim payments if someone brings a judgment against your company.
  • Commercial vehicle insurance: You’ll need this type of coverage if you have employees who drive vehicles while conducting professional business. In most states, commercial vehicle insurance is a legal requirement.
  • Workers’ compensation insurance: Different states have different workers' compensation laws, so it's important to check the laws in your state if you employ anyone at your business. This type of insurance provides coverage for work-related injuries to employees.
  • Property insurance: To protect your business property from everything from computer viruses to fires, you’ll want property insurance.

These are just a few of the most well-known types of coverage you should look into when purchasing business insurance for startups. If you have any special risks that aren’t covered by the types of coverage listed here, be sure to ask your insurance agent what additional coverage types you should add to your policy.

3. Don’t Select Coverage Based Solely on Price

Most savvy business owners constantly look for ways to save money, and that’s a good thing. But when it comes to your insurance coverage, you don’t want to select a policy just because it’s the cheapest one available. Every penny counts when you own a small business, but that’s exactly why you should make sure the policy you’re getting provides sufficient coverage for your needs.

Purchasing the cheapest business insurance for startups could cost you more in the long run by failing to help you manage your risks effectively. Cheaper policies generally offer limited coverage, which can, in turn, leave you more vulnerable to risks. Generally, it’s better to purchase policies based on coverage rather than cost.

4. Make Sure You Understand Your Deductible

The amount you’ll need to pay before your insurance policy activates to cover a loss is called the deductible. Most business insurance policies have a deductible, so you’ll need to plan on paying it before your coverage picks in.

Once you’ve paid your deductible, your insurance policy will cover the remainder of the claim amount (until the policy amount is reached). To make sure you don’t end up spending more out of pocket than you can reasonably afford, don’t purchase business insurance for startups unless you fully understand your deductible and how much you may have to pay.

5. Compare Insurance Policies From Multiple Providers

You have a lot of choices when it comes to business insurance, so be sure to compare policies from multiple providers before settling on the one you want.

Different insurance providers offer different policy types and amounts. The more you know about what’s available, the easier it will be to make a good final decision regarding your business insurance.

6. Consider Getting More Coverage Than You Think You Need

Even if you think your chance of being sued is slim, you never know what might happen down the road. A single lawsuit could devastate your business finances. To prepare for whatever may happen, it’s usually better to get more coverage than you think you’ll need. It’s better to be over-protected than under-protected when it comes to business insurance for startups.

7. Reevaluate Your Coverage Needs Every Year

Your coverage needs this year may be different than your coverage needs next year. As your business grows and you hire more employees or expand your business operations, you may require additional coverage. To make sure you’re always adequately protected, reevaluate your coverage needs every year and purchase additional coverage as needed.

8. Work With Reliable Insurance Providers

Your insurance policy is only as good as the provider through whom you purchase it. To make sure you get the coverage you need when you need it, only work with reliable insurance providers. Fullsteam Insurance is a respected insurance broker company that can help connect you with the best insurance carriers in the world.  

Get Quality Business Insurance for your Startup

When you’re searching for business insurance for startups, it helps to have an insurance broker walk you through the process of selecting the right policy and insurance company. Here at Fullsteam, we are trusted insurance brokers for businesses of all sizes, including startups.

Contact us and we'll connect you with reliable insurance carriers so that you can run your business with greater confidence while minimizing your risks.

Tyler Crawford
by Tyler Crawford
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