When you’re beginning your startup, you might wonder when you need to purchase various types of insurance for your business. At the same time, you might question which types of insurance your business needs to succeed. Let’s go over why your startup needs insurance along with which types of insurance are best to purchase during each funding round.
Why Do Startups Need Insurance?
Getting your startup going can be stressful, but it is also incredibly rewarding. You probably put a lot of time and money into your business but don’t want to lose any of your progress. Insurance can protect you from various risks that could threaten your livelihood and your business.
You may need different types of insurance based on the type of business you run and which kinds of processes your company conducts. For example, insurance can prevent you from being held liable in the case of a lawsuit or cover a worker’s medical costs if they are injured on the job.
Even if you try to follow all regulations and rules for your industry, revving up your startup can still feel risky. As such, it is always an excellent idea to purchase insurance for your startup to give you peace of mind and protect you in case something does happen.
When To Buy Startup Insurance
When you decide to purchase insurance depends on your risk tolerance. If you are concerned about losing all of the hard work you’ve put into your business, it’s best to get insurance as early as possible.
That said, there are a few circumstances that may require you to get insurance for your startup early on. For example, once you close a round or hire employees, you will definitely need insurance. For the former, you will need to protect your investors from liability. For the latter, you will need to purchase worker’s compensation to protect your workers.
There are other reasons you may need to purchase insurance, such as when you sign a contract. Thus, it’s important to keep up with your business operations and ideally purchase insurance as early on as possible.
If you are ready to protect yourself and your business, we at Three Arbor Insurance are here to help. We are an independent agency passionate about guiding you through every step of the insurance process. Get a quote today to get started!
