The best time for your company to have business insurance is before you need it. Sounds obvious, right? And still, hundreds of startups charge headlong into the world of business every year with no—or limited—insurance. Unfortunately, misfortune seldom waits until you’re ready to deal with it. This is why businesses need insurance from the get go. While there are many different types of business insurance to consider, there’s one in particular every company should start with, and CoverHound can help you get it quickly—at affordable rates.
What is it? Read on.
Problems Slip through Coverage Gaps
Leo Welder, founder of the online startup guide ChooseWhat.com recounted his first-year insurance experience to Inc. Magazine. Welder overlooked intellectual-property (IP) coverage because he didn’t foresee the filing of patents or any other activities he thought would call an intellectual property issue into play.
(You already see this coming, right?)
His company wound up in a trademark dispute with a company called J2 Global over usage of the term “efax.” Without IP coverage, Welder found himself on the hook for hundreds of thousands of dollars in fees related to his defense. In the process, he learned, like so many other entrepreneurs who have found themselves in similar situations: problems tend to slip through the gaps in your coverage.
So, what’s the one type of insurance every business should have from the get go?
General Liability Insurance
As its name implies, general liability insurance (GL) is something of a catchall. In addition to protecting you against property damage and bodily injury claims, GL covers areas like libel, advertising mistakes and reputation damage, too.
And yes, GL would’ve covered Welder against copyright infringement.
Now before you think GL is a panacea, you should know it doesn’t cover professional mistakes, employee workplace accidents, damage you cause to your own business property, data breaches, crimes and/or employee dishonesty. Those fall under the headings of Professional Liability, Workers’ Compensation, Commercial Property Insurance and Cyber Liability—respectively. Luckily, taking out a Business Owners Policy (BOP) combines some of the essential coverage new businesses need into one bundle, including general liability and property coverage (often along with business interruption insurance).
Which is why you should always…
Be Forthcoming with Your Insurer
Your natural inclination is to try to save as much money as you can when you discuss your business with an insurance company. Just as Welder thought he could bide his time and get the additional coverage he needed once a few other things fell into place, lots of business owners tend to gloss over their activities in an effort to retain their capital for other areas of the business. However, this is false economy. As Welder discovered, one untoward incident can undo all of those savings—instantly.
It’s best to consider all of your activities to get the riders and endorsements to ensure you have all of the types of business insurance you need. CoverHound makes it easy to compare quotes online. Try it today.