Start Ups and Commercial Insurance

Elliott Insurance Services    November 27, 2019
Start Ups and Insurance

Starting a business is a mix of excitement, pride, and a touch of dread. You start thinking about all of the different aspects of business operations that you must have in place in order to run a successful company. One of those important pieces of your successful business puzzle is to make sure that the company you worked so hard to start is able to operate with a safety net of a properly placed insurance policy.

An insurance policy won’t protect you if your business doesn’t take off, but it will protect you in a various number of other scenarios. It’s important to have a conversation with an insurance broker to find the areas of your business that could be vulnerable to a large financial loss and if you could protect your company with a properly placed insurance policy. You may be surprised the areas that your company could be vulnerable and the options you have to protect it.

Hopefully in this article we will help you on your way to knowing a little more about protecting your business, but also to calm down any fears or any trepidation’s you may be feeling about contacting an insurance broker for help with your new business.

I Have Never Owned a Business, Can I Still Get Coverage?

The short answer is yes, you can still get insurance for your business if you have never owned a business before. It would make it easier of course if you did have previous insurance experience operating a company, but by no means is it mandatory.

Insurance companies will take a look at your company and its operations. They will also look at you and your experience in the field you are opening a business. Even though you may have 0 years experience operating a business, you may have 5 or 10 years working in that industry. Insurance companies will recognize this experience you bring to the company and will consider that an asset.

If you don’t have any experience owning a business or working in that same industry, it may be harder to place that insurance for you. Harder doesn’t mean impossible, and such as retail stores, there are some industries where this may not be as big of an issue. Let your broker know if this fits your situation right away so that they can try to contact as many companies as they can to try to obtain that policy for you.

Do I Have to Have Insurance?

Your contracts or lenders may require you to carry insurance, but in terms of government enforcement, you do not need to carry insurance for your business. That being said, it would be an extremely unwise decision to not carry insurance on your business. Not only is the insurance there to protect your financial losses due to situations outside of your control, but it’s also there to protect your company that you worked hard to create. If you were to sit down and weigh out the pros and cons of not having insurance, you will most likely call an insurance broker immediately to obtain coverage.

What Type of Coverages Do I Need?

Commercial insurance is usually tailored to the needs of the business, but in some instances, there may be already prepackaged policies for the exact type of business you operate. Insurance companies offer these prepackaged policies that have been tailored made to different industries due to their popularity in the business world, but also due to their unique coverage needs. If your business fits one of these prepackaged policies, they usually offer very broad coverages as the research has already been done as to what coverages are needed for these types of companies. Within these packages you will usually find your CGL (Commercial General Liability), and extra endorsements to fit the industry needs for coverage.

If your company does not fit in one of the prepackaged policies, you should not worry at all. You will first need to put in place your CGL (Commercial General Liability), then add extra policies or endorsements from there to make sure your business is properly covered.

Depending on the type of business you are operating, you may want to look at coverages such as Equipment Breakdown, Cyber Insurance, Errors and Omissions, or even a simple coverage such as a flood endorsement. There are many coverage options and endorsements to ensure that your business is properly protected.

For example, if you are running a Technical Support company, you will want to make sure you at the very least have a CGL and an E&O (Errors and Omissions) policy in force. The E&O coverage is there to protect your company in the event you made a mistake on setting anything up that caused a loss for your client. This could be from data loss, open vulnerabilities that were exploited, or even down time for their company due to your hypothetical mistake or lack of action.

Due to the wide variety of different businesses and industries, we can’t possible list all of the coverages that you specifically need for your new start up. As mentioned above, we consider it critical that you have a sit-down conversation with an insurance broker to make sure your company is properly insured. The insurance broker will most likely have experience in insuring companies exactly like yours and they can also point out the areas where you may not have considered being at financial risk. Starting a company can be hard, but making sure it is running for years to come is much harder. Let that insurance broker help you get your business to that point in its evolution.

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