Where you are as a startup vs. where you’ll be as a success will be light years apart in terms of responsibility and liabilities. You’ll add employees, your sphere of operation will expand and you’ll acquire more facilities and equipment. To ensure you’re adequately protected, you’ll need commercial insurance from day one—and more than ever as you expand.
Success has a way of scaling your business insurance needs right along with company growth. It’s important to know exactly what your policy does (and does not) cover, and even shop around occasionally to make sure you’re getting the best available terms and rates on the market.
When You’re a Startup -
Business insurance must be among the line items for which you budget when you’re planning your operations. At minimum, you’ll need a Business Owner’s Policy (BOP) to defend you against basic property and liability exposures. Errors and omissions insurance will cover you against claims of deficient work product, inaccurate advice or negligent services. Finally, if your business is mobile, you’ll need commercial auto coverage.
You’ve Got Employees Now -
Once you start adding people to the mix, your responsibilities grow, as do your potential liabilities. You’ll need to add worker’s compensation insurance to cover your people should one of them become injured on the job. In that scenario, you could be on the hook for medical bills, wage replacement and other considerations. Employees also occasionally mean people problems, some of which can lead to litigation. Employment practices insurance will be your best friend in those instances. If you hope to attract the most skilled individuals, you’ll also have to put a retirement plan in place. This means complying with the Employee Retirement Income Security Act of 1974's bonding requirements.
Risks Increase as You Gain Altitude -
You’re now considered to be a high-flying company, which means you’ve shown up on the radar screens of hackers. A cyber insurance policy will cover your digital assets, as well as your liability, should a malevolent system intrusion compromise sensitive client data.
Adding umbrella coverage to beef up your BOP (complete with property insurance and general liability coverage) is a good idea at this point—after all, you have more expensive equipment and premises, plus more third parties coming and going from your site. More staff means more cars and trucks, so it’s prudent to ensure your commercial auto coverage is keeping pace with the growth of your motor pool. As you bolster your operations, consider all the new ways in which employees could become injured or ill on the job—and ramp up your workers’ compensation policy to cover your entire workforce.
We’re speaking in general terms when it comes to growth. Depending upon your industry, you’re likely to need other more specialized types of commercial insurance coverage as well. For example, companies with fleets will require more protective commercial auto insurance that goes beyond minimum liability coverage.
CoverHound can help you make sure you’re adequately scaling your business insurance needs with your company growth. Get started today by answering a few simple questions about your operations!