Insuring Your New Business: What Do You Need?

Congratulations! You’ve Started Your Business! Now, Do You Need Insurance?

Welcome to the world of entrepreneurship! You’ve got your business off the ground, and you’re already hustling. But now you’re probably asking yourself a question you didn’t even know you’d have to think about: Do I need insurance?

Spoiler alert: The short answer is YES—probably.

I know, I know. When you’re just starting out, every dollar counts. You’re focused on keeping expenses as low as possible while you build value and start attracting clients. But trust me, overlooking business insurance can come back to haunt you. The last thing you want is to face some unexpected liability costs that could eat into your hard-earned profits. Insurance is a smart investment that helps protect you and your business from the unpredictable.

Now, let me be real with you for a second. I’m not a fan of buying insurance. I really don’t like it. To me, it feels like a constant reminder of all the what-ifs—what if something goes wrong? What if I’m sued? What if I lose everything? But here’s the thing: thinking about the worst-case scenario is what helped me weather through lawsuits, personal health issues, and even Covid. So when I tell you that insurance is non-negotiable, trust me, I mean it.

What Type of Insurance Do You Need? Let’s Break It Down!

Depending on your type of business, your insurance needs will vary. There’s no one-size-fits-all, but here are some of the most common policies that small business owners need to know about.

• 1. General Liability Insurance

  This is a MUST-HAVE for almost every business, big or small. It covers the basics—things like bodily injury, property damage, medical fees, and even advertising harm. It’s there to protect you from the financial fallout of accidents that might happen during the course of doing business, whether it’s a slip-and-fall in your shop or a mistake made by one of your employees.

  2. Professional Liability Insurance

  Okay, this one’s a bit of a doozy, but it’s necessary. Professional liability insurance covers you if someone sues you over something you did (or didn’t do) in your professional capacity. Think missed deadlines, mistakes, or even bad advice that results in a loss for a client. It’s one of those things you hope you never need to use, but when you do, you’ll be glad you have it.

  3. Equipment and Tools Coverage

  If your business relies on equipment (looking at you, contractors, photographers, and anyone using expensive tools), this one’s for you. You can often bundle it with general liability insurance, but make sure it covers things like stolen or broken tools. It’s affordable and essential for anyone who has gear that’s vital to their business operations.

  4. Commercial Property Insurance

  Do you have a storefront, office, or even a storage unit? If so, you need commercial property insurance. It’s often required by landlords, but it’s also just smart business. This policy protects your physical space and any equipment, products, or inventory inside. But be careful—not all commercial property policies are the same. Make sure it covers the worst-case scenarios, like fires or floods, because not all policies include these types of disasters.

  5. Commercial Auto Insurance

  Driving for business? Don’t assume your personal car insurance will cover you. If you or an employee are using a car for work, you need commercial auto insurance. Regular auto policies typically don’t cover accidents that happen while driving for business purposes, so this is one you definitely don’t want to skip.

  6. Workers’ Compensation Insurance

  Ugh. I hear you. “I don’t want to be forced to carry insurance.” But depending on your state, you may be legally required to carry workers’ compensation—even if you’re the only employee. It’s there to protect you and your employees in case of workplace injury. It covers medical expenses, lost wages, and more. It’s an investment in the health and safety of your team, but I get it—it can feel like a hassle.

  7. Unemployment Insurance

  If you have employees, you may also be required to carry unemployment insurance. It provides benefits to workers who lose their job through no fault of their own. (Of course, we all know sometimes people quit and still try to claim it, but that’s another story.) Regardless, it’s usually a legal requirement and helps protect your employees if they’re ever in a tough spot.

  8. Business Owner’s Policy (BOP)

  This is a package deal that bundles together a few different types of coverage—usually general liability, property insurance, and sometimes even business interruption insurance. It’s a great way to save money while getting a solid level of protection. But remember, it’s not a catch-all—make sure your BOP matches your specific business needs.

  Believe it or not, there are actually MORE types of insurance policies you can obtain, but these are the ones I find most common for small business owners. Now you get to choose the company and the coverage that’s right for you (oh, goody).

More Insurance to Consider

Okay, I know I said I’d keep it short, but I’ve got to mention a few other types of insurance that can be crucial depending on your industry:

• Cyber Liability Insurance: If you handle sensitive data or online transactions, this one’s a must. It protects you from cyberattacks or data breaches.
• Product Liability Insurance: If you sell physical products, this policy protects you in case your product harms someone or causes damage.
• Key Person Insurance: If your business is built around one person (a founder or leader), this insurance helps protect the company financially if something happens to them.

How to Pick the Right Insurance

Now that you know what types of insurance you need, here are some tips for picking the right policy for your business:

1. Go for a Personalized Policy
   You could go with a generic “catch-all” policy, but it’s smarter to get a policy tailored to your specific needs. A personalized plan will consider your industry, location, business size, and your unique risks. For example, if you’re a yoga instructor who only teaches small classes, you don’t need coverage for group circus performances.
2. Consider the Cost vs. Value
   You don’t want to spend your last dollar on insurance, but you also can’t afford to skip out on protection. Look for affordable policies that don’t skimp on coverage. Many companies offer low or no deductibles and payment options that make it easier to manage your premiums.
3. Online or In-Person?
   You can go with either online or in-person insurance providers. Online offers convenience, but sometimes it’s nice to have a real person who can answer questions and walk you through your options. Either way, just make sure the company has great customer service.

Final Thoughts

I get it—insurance is probably not the most exciting part of your business journey. But it’s an essential step that could save you from serious headaches down the road. No one plans to get sued or face a catastrophe, but when it happens, having the right insurance can make all the difference.

So take a breath, shop around, and get the coverage that makes sense for your business. Good luck, and here’s to protecting your hard work!

Good luck and good business!