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Five Must Have Insurance for Startups

With so many insurance options available, it’s often difficult for start-ups to know just where to, well, start. For most new businesses, five policies form a solid foundation for commercial insurance coverage. They are:

Comprehensive general liability insurance (CGL): CGL protects the company’s assets if a claim is made for damage of property or personal effects, third-party bodily injury, or an “advertising injury,” such as libel or copyright infringement. It’s the most basic coverage for every business—start-up or industry giant.

Directors and officers liability insurance (D&O): Start-ups typically need influential members on the board to grow the company and must provide proper liability insurance to protect these board members against litigation relating to business decisions.

Cyber/media insurance: The need for this coverage is clear. With the proliferation of high-profile hacks, no business is safe from cyber attacks. As these policies still have no “standard” format, each start-up will need to work with an insurance agent to determine the right coverage for its needs.

Employee liability insurance: This policy is separate from state-required workers’ compensation insurance, and provides coverage to defend the company against discrimination claims by employees. It’s usually available as part of a package that includes workers’ comp or D&O policies.

First-party property insurance: This covers company property against physical damage. While some start-ups have few physical assets initially, this is still an important policy to have, and coverage likely will need to increase as the business grows.

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