Must have insurances for a startup

Here goes a few insurance options for startups…

We understand that the biggest risk for any startup is the risk of being unsuccessful. Although there are no insurances to cover you against failure, there are many others which should take care of other exigencies that a business may be vulnerable to.  These exigencies may be due to natural disasters or liabilities due to day- to- day affairs of the business.

It is also important to understand there is no single insurance that will be applicable to all startups. Also as a startup grows, insurance needed may differ according to business phases.  

Here goes some of the insurances that startups must have:

Liability Insurance Covers

Running a business means you could be in the sale of products or services. Liability insurance covers are needed for businesses/startups/individuals who may be held liable for their actions performed in the course of the day- to- day activities of the organization.

These are some of the important liability covers:

Public liability insurance: Though this is not a mandatory cover in India, this insurance takes care of liability imposed on a startup or its employees due to its negligence. This insurance is important for startups that have an impact on third parties. Public liability insurance provides you with legal costs and protection against damages on account of suits filed by the third party.

A startup dealing with products could also go in for product liability insurance which covers damages (not intentional) caused to the third party while using your product. Product liability insurances could be customized to suit your needs. Startups into food products, child care equipment, medical equipment should have product liability insurance.

Credit Insurance: Managing finances is an important issue for many startups. A loss could occur due to default or insolvency on a debtor's part. A credit insurance helps you in mitigating this risk.

Employer liability insurance: An employee of a startup may get injured during the course of performing his/her duties. Employer liability insurance will cover liabilities occurring on this front.

Property Insurance Covers

Asset insurance: A startup would have an office and some assets within. Asset insurance covers like home insurance or office insurance provide cover for damage to the property either rented or owned. This insurance can be only of the structure of the office or could include its contents like furniture and fixtures. Property insurance could be extended to cover machinery, if any, within the office premises. General perils covered under this type of insurance include fire, burglary, earthquakes, terrorism etc. Certain policies do not cover floods. Some policies also provide for repair of electronic and electrical equipment used within the premises. Startups running out of residences of founders can also consider getting home insurance cover.

Auto Insurances: In case a startup uses vehicles for transportation of its products with an auto insurance helps. This is similar to vehicle insurances that we take on private vehicles. Decide on a comprehensive cover or at least a third party liability cover.

Insurance for goods in transit: In case your organization is into sale/transport of products to different places, having insurance for goods in transit makes sense. You may decide to take this cover on a case by case basis also.  

Other than these travel insurance for your employees as and when they travel, group insurance and accident insurances are some other covers you may require as you grow bigger.

Whatever, be the size of your startup, be insured and be safe.

Have you opted for any insurance plan to keep your business secured? Please share your story.

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