6 Insurance Coverage Plans Startups Offer Businesses

Insurance CIO Outlook | Sunday, April 26, 2020

Business is always exposed to certain risks, making it important to have the right business insurance in place. Fortunately, startups are giving access to a wide range of coverage options to protect the business against dangers.    

FREMONT, CA: Running a business comes with inherent risks- a natural disaster could affect business, or a client could file suit alleging a contractual breach. Given that, it is essential to protect business assets, and one of the best ways to achieve this is to make sure the business is adequately insured. With proper insurance, business owners can achieve peace of mind and focus on business excellence, productivity, and profitability. Knowing the importance of business insurance, several insurance startups are offering a broad range of coverage types and plans that business owners may need. Below are some of the key coverage types startups offer businesses.       

• Professional Liability Insurance

Business is never resistant to errors. This makes it important for business professionals to protect their business interests against legal claims for error, omissions, and professional neglect. Professional liability insurance helps business owners to cover all legal claims arising from the covered perils. Businesses having professional liability insurance can protect themselves from the time-consuming work and expenses that come with a legal defense after a client claim. Startups offering professional liability insurance protect their clients against lawsuit arising from work errors, failure in promise, uncompleted work, alleged negligence, misrepresentation, and inaccurate advice.  

• Workers Compensation Insurance

Employers are always obliged to take reasonable care to ensure that the workplace is safe. When accidents happen, workers compensation insurance provides coverage to help businesses recover and run smoothly. Workers compensation insurance provided by insurance startups mainly serves two purposes- ensuring that injured workers get medical care and compensation for the income they lose while they are unable to work and protecting the employers from lawsuits. Workers also receive benefits regardless of who was at fault. Even one claim for a serious employee injury could bankrupt business, workers compensation coverage provides a predictable cost for handling the risk. 

• Business Interruption Insurance

Business interruption insurance is designed to cover lost income when business owners are forced to close a business temporarily because of events beyond their control. It is an additional protection that goes beyond common insurance policies like property insurance. Startups that offer this type of insurance are covering revenue, lease payments, relocation, employee wages, taxes, loan payments, and losses cause by damage that prevents access from buildings. Above said are various coverage options, and there are many considerations businesses must weigh when purchasing business interruption coverage. Startups in this landscape are even offering customization based on individual company needs.

• Commercial Auto Insurance

Commercial auto insurance helps businesses pay for the repair of the physical damage to the vehicles used for businesses if vehicle is robbed, damaged by bad weather, or collisions. It can also pay for lawsuit costs with accidents, including medical expenses and legal fees. Commercial auto insurance providing startups are coming up with protection for auto liability, medical payment, physical damage and collision, and uninsured motorist coverage. Many entrants offer customizable policies so that business owners only need to buy the coverage that their business needs.  

• Directors and Officers Insurance

To protect business and its decision-makers from the risk of getting sued or being held legally responsible for any negligence or injury, emerging insurance startups are providing directors and officers with liability insurance. Startups are offering policies that cover the legal payouts and the legal costs for which insureds would be responsible if suits filed against them are found to be legally liable. The directors and officers of the organization, non-executives, risk managers, supervisory or managerial personals, and secretaries are covered under liability insurance. Directors and Officers Insurance can help businesses face all eventualities, so it is always better to stay insured and let the business scale the height of success.

• Cybersecurity Insurance

Modern business technology opens up many possibilities but also raises some cyber protection concerns. Threats of data breaches and computer hacks are real for all businesses. With hackers becoming bolder and cyber-attacks getting frequent, business owners must take control of their security and protect themselves. Cyber insurance provides businesses with the coverage they need to protect their most valuable assets – data. The best cybersecurity insurance startups in the market take a three-pronged approach, and they are to prevent, detect, and mitigate risk. Startups are provisioning programs to educate organizations about the importance of cybersecurity, facilitating ongoing monitoring of critical networks, reviewing response plans for emerging threats, and insuring against financial risk with a stand-alone cyber policy. Startups are also providing immediate support to data breaches, cyber extortion, and data recovery.

Business insurance plays a predominant role in supporting entrepreneurs and helping them overcome various hurdles.  

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