Insurance for Startups
Why do startup businesses need adequate insurance coverage?
Why every startup needs business insurance?
Startups, by their nature, face numerous risks—from financial instability and legal liabilities to accidents and operational failures. Business insurance helps manage these risks by providing financial protection against potential losses. With the right coverage in place, your startup can protect your buildings, contents, equipment, stock, data, revenue, employees, customers, and your reputation, leaving you free to concentrate on successfully running your company. Also, don't forget your insurance premiums are tax-deductible.
Certain types of coverage are legally required to trade. For example, employers' liability is a legal requirement if your startup employs staff. Complying with these requirements not only protects the startup from the costs associated with workplace accidents or injuries, but fines for not having the correct cover in force. Whereas, public liability insurance is critical for startups as it protects against claims of bodily injury or property damage - recommended for all businesses that interact with third parties. While of you provide a service, professional indemnity insurance provides potection against claims of professional negligence or failure to perform professional duties.
Arrange startup insurance from the leading insurers
We work with the leading insurers to financially protect your startup from a range of diverse risks. Partnering at an early stage with a small business insurer means you'll be sufficiently protected from legal costs, financial loss, claims for compensation, as well as property damage. With access to a wide range of risk management products, we can ensure your policy provides adequate cover. As an insurance broker we can assess your needs and find the right coverage that matches those needs, while cost is a factor it is important to consider the value of the cover offered is just as important.
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How much can startup business insurance cost?
The cost of insurance for startups varies depending on what you do, and what cover you require. There is no one-size-fits-all, your business insurance should reflect your unique set of circumstances. For a small startup business with a couple of employees, meeting your legal obligations and purchasing employers liability insurance can cost as little as £80 per year or £6.67 per month.
"While it might not be top of your to-do list, having the right startup cover in place could be the difference between the success and failure. If you’re not insured and a claim seeking damages is made, it's unlikely you will have suffcient resources to adequately defend the allegation or replace the asset."
How start-up insurance can help company growth?
Having the right start-up coverage is essential for startup companies and it also demonstrates to new clients and investors that you’re serious about what you do. Likewise staff, directors and potential investors will be reassured that you have a cover in place to protect the day to day activities. In an increasingly litigious society protecting your company with covers such as professional indemnity insurance, has never been more important.
Promotes confidence
Having adequate protections in place promotes confidence in the company that you have the financial resources at your disposal should the worst happen.
Contractual obligations
It's common practice for counter-parties to request minimum amounts of cover when negotiating contracts for goods and services.
Risk management
Business insurance is a useful risk management for companies of all sizes to transfer unexpected and costly events from their balance sheet.
Find startup business coverage that is tailored to the specific needs of your industry
Financial protection is an important consideration for any startup, talk to a broker today about your needsWill our business insurance evolve as our startup grows?
Size of the business
As your company grows so will your coverage requirements. Additional covers are typically purchased along with higher coverage limits to ensure the balance sheet is adequately protected.
New products or services
If you pivot into offering different services or different industries, it is vitally important that you keep your broker up to date to ensure your current business insurance is suitable to meet your needs.
Emerging risks
The environment in which you operate continues to change, therefore consideration should be taken to emerging risks. Every company should consider their coverage each year to ensure you are protected from new and changing risk exposures.
When is the best time to get business insurance?
Early consideration
While Employers Liability is a legal requirement, other types of cover are optional, however, you should consider your when your potential legal liabilities start - is that when you start providing your services (professional indemnity), or when you incorporate the company (directors and officers)?
Underwriting your risk exposure
The application for cover and underwriting process to access your risk exposure will either be made on a Statement of Fact, or a Proposal Form basis. The industry you work, the type of services you provide, projected annual revenue and employee numbers, alongside other factors, will impact which route to market is best suited to your needs.
If you do not have a trading history, it is prudent to offer conservative projections for your first year's revenue. Given insurers will base their premium calculations from these projections. It's common for startups to identify overly ambitious revenue projections, however it's recommend you consider what is reasonable with so many unknowns that could hamper your targets.
The 'Statement of Fact' basis is usually the most affordable route to market because the insurer will accept your risk exposure at a pre-determined premium calculation if you can adhere to specific assumptions. These could be with respect to the scope of your activities, size, expectations for growth, cyber security, and other minimum risk management controls.
What are the largest insurable risks facing startup companies?
The exposure to risks as a startup might appear smaller compared with large corporates, but an unfortunate accident can spell the end for a startup business. Losing valuable assets or third parties taking seeking damages against the company can bring unmanageable costs, before the business really has a chance. If you require insurance for your software company please follow the link.
Compensation claim
These occur when a third-party demands damages from your business and takes your to court to see compensation for a loss they have suffered.
Financial loss
If your business suffers damage, destruction or theft of property you own, how easily can your startup replace those items that are essential to trade?
Legal costs
The cost to defend a liability claim made against the business can be very expensive - legal fees can mount up very fast and cause significant financial harm.
Get business insurance for your startup at an affordable cost by talking with Get Indemnity™
Compare startup insurance from different providers to ensure your cover is suitableWhat business insurance covers should our startup buy?
Professional indemnity
Startup companies should consider protection against the failure to exercise reasonable skill and care in the provision of professional or advisory services.
Directors and officers
Startup companies should consider protection for individuals against civil, criminal and regulatory proceedings, while acting in a managerial capacity on behalf of the company. Protects the insureds personal liability for financial loss suffered by third parties.
Cyber insurance
Startup companies require protection against first and third-party losses arising from security and privacy breaches.
Public liability
Startup's require cover designed to protect business owners against claims that result in legal proceedings from third parties, covering injuries and/or property damage.
Employers liability
Is a legal requirement for all employers in the UK, it provides protection for employees if they meet with an accident or incur an illness in the course of their employment, where their employer is responsible.
Property damage
Can help protect your buildings and contents against loss or damage from a range of different perils. For example, fire, theft, accidental damage, storm, flood, escape of water, impact, explosion and riot.