startup insurance-isure

5 Essential types of insurance you need for your startup


If you’re anything like most startups you are laser focused on proving your business concept, obtaining funding and most importantly growing your business.  The concept of protecting your startup business with insurance usually comes when you’ve reached a certain critical mass and need to satisfy shareholders and customers that you are protecting yourself and them from risk.  In a nutshell, you need to show that you’re legit.

Here are the essential insurance products that a startup need to consider:

Commercial General Liability Insurance (CGL)

CGL Insurance is designed to cover your company’s assets in case you are sued for bodily injury or property damage to other people or businesses.   This would also cover any property in the form of office equipment, stock, IT hardware, etc.  Coverage usually includes legal defense so it’s like having you own built in legal team. Remember to purchase enough liability coverage.  Most contracts require $2M but some larger clients will require $5M or more.

Errors and Omission (E&O) Insurance

This insurance is essential for anyone who is offering a professional service.  Traditionally reserved for Doctors, Lawyers and Accountants who offer more traditional services, today E&O is needed by most startups.  If you are doing any type of consulting or technical work, you probably need E&O insurance.  Just ask yourself “does anything my business does, or neglects to do, have the potential to harm a client?”.  If the answer is yes, you definitely need this coverage and your clients will likely require it by contract.

Cyber Insurance

It seems like almost every day now we are hearing of businesses whose data has been hacked.  If you have any client data at all you probably need Cyber Insurance.  In an increasingly digital world this is the number one fastest growing coverage to purchase. Coverage typically includes liability for stolen client data, legal defence and crisis management.  This coverage can’t come more highly recommended, in today’s world it is a must have.

Directors and Officers Insurance (D&O)

If you’re looking for the right angel investor or bringing in the right board members, they’ll want you to have this coverage.  Any acts of the C level Executives, Officers and Directors need to be covered under this policy.  You may purchase first and third party coverage to protect such things as wrongful acts, shareholder or M&A lawsuits, and class action lawsuits.

Employment Practices Liability (EPL) Insurance

Once you’ve purchased D&O Insurance it is highly recommended you tack on Employment Liability Insurance.  Often confused with worker’s comp, this covers the company and executives from potential employee lawsuits.  Whether it’s wrongful termination, sexual harassment, or human rights claims over discrimination by gender, race, age or sexual orientation, this coverage is essential for any employer that has a workforce.  Especially if you’re a smaller company and don’t have robust human resources, you’ll want to spread the risk of employee lawsuits with some insurance.  Unfortunately it’s a rite of passage for any growing company.

Insurance for Growing Businesses

There are myriad other coverage a business might want to purchase as they grow such as business interruption, crime, employee fidelity, accounts receivable and non-owned auto coverage just to name a few.  A good insurance broker should be able to tell you when it’s essential to purchase each coverage at each stage as your startup grow from a great idea into a power to be reckoned with.

If you want to protect your startup contact our brokers  the way you would like to by clicking here or get your startup a free online quote through this link .


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