Why Business Insurance is Essential for Startup Companies
Business people who are in the process of developing a startup company may hope to delay insurance costs. Insurance might feel unnecessary in the early stages, but an accident, lawsuit, or natural disaster can be disruptive and costly. All businesses need one or more insurance policies to guard against losses that could sink a new venture. A business lawyer can alert you to the specific areas of liability that your business might face.
Common Reasons Startups Need Insurance:
- A landlord requires insurance to sign a building lease.
- Your new business has hired employees, which incurs the legal duty to buy a workers’ compensation policy.
- You have investments in equipment or raw materials to protect.
- Dissatisfied customers could sue you for product or service failures.
- You breached a contract.
Types of Business Insurance
An Indiana lawyer could evaluate your business’s risk profile based on its size, location, products or services, staffing, and physical assets. Not every business needs the same levels of protection, but most need some combination of insurance products.
- Commercial Property Coverage
A fire, flood, or wind storm could damage the equipment necessary to run your business. Insurance can cover the cost of replacement. Some policies could even compensate you for lost income during downtime resulting from the disaster or accident.
- General Liability Insurance
Most any business needs a general liability policy. Even in the startup stage, bad luck or negligence could result in someone’s injury. Insurance can offset the expenses of legal representation and payment of a settlement.
- Product Liability Insurance
Even if your product has passed safety testing, the possibility remains that a creatively unlucky customer could be injured by it and sue your fledgling company for damages.
- Professional Liability Insurance
Also known as errors and omissions coverage, professional liability insurance protects you against losses resulting from your mistakes.
Risk Does Not Wait for Success
An employee accident, injured customer, or building fire has no relation to a company’s age. A startup is just as vulnerable to something going wrong as a 100-year-old company. A mistake or accident in the beginning weeks and months could derail your business before it even has a chance to succeed. Appropriate insurance coverage can make it possible to rebuild or continue operations when confronted by losses.
Legal Advice for Startup Business Planning
A business lawyer applies experience gained with many clients to each new client. To tap into a broad knowledge base that includes insights about potential liabilities, contact Webster & Garino today. Call us at (317) 565-1818.