What type of insurance policies do I need for a startup?


Do startups typically buy insurance coverage? If so, what are the types of insurance policies that I should consider?


by Zarig.com

It depends on the kind of startup and on a number of issues.

Are you a funded startup or are you bootstrapping?  Do you have any revenue or any traction?  Do you have employees?  What industry does your start-up operate in?

In general, it’s a good idea for businesses to have the following insurance coverage:

1)  Workers Compensation

2)  Business Property Insurance (to protect in case of fire, theft or damage)

3)  Business liability Insurance (to protect the owner and company from liability)

4)  Errors and Omissions insurance (to protect in case of errors or omission)

5)  If the company has a car, then Auto insurance is also needed.

Other insurance may be required depending on your type of business and situation.


Naomi Kokubo

Naomi Kokubo

by Naomi Kokubo, Cofounder of LavaMind

In addition to the above, many venture-funded startups obtain directors and officers liability insurance (often called a D&O policy).   This is liability insurance payable to the directors and officers of a company, or to the organization, to cover damages or defense costs in the event they suffer such losses as a result of a lawsuit for alleged wrongful acts while acting in their capacity as directors and officers for the organization.

There’s also additional insurance you can get that covers the death of one of the founders, which can critically impact the value of a company.

I recommend sitting down with an experienced business insurance broker and going over all the options.

I hope this helps!

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