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Business Insurance for Small Startups

By May 29, 2013August 6th, 2021No Comments

Edmond Business InsuranceSmall startups are the core of the entrepreneurial spirit. When a startup begins to take wings, the emotional and financial rewards to workers can be extremely satisfying. Finding success involves a number of factors, including a good business plan, stable financing and an understanding of legislation/license requirements, and knowledgeable advice from mentors can help lessen the level of risk involved. One of the most important ways to keep a small startup healthy, protected from risk and heading towards success is by paying close attention to insurance needs.

Some types of business insurance are compulsory for any small business, while others may be optional, but advisable. Although most people don’t want to buy unnecessary insurance, it is unwise to skimp on adequate insurance coverage. In a disaster situation, having the right business insurance can mean the difference between survival or failure. Here are a few areas to consider:


Business assets can include office, warehouse, or retail space and any equipment used, such as cash machines, printers, computers, supplies. A portion of one’s home may be used for business, along with one or more vehicles. Stock and supplies can be lost, stolen, or destroyed. Business property and content insurance will protect these assets.

Motor vehicles:

Small startups may have vehicles requiring business insurance coverage. Even when the business is home-based, a vehicle may be used for transport of supplies, client visits, and a multitude of other business-related activities. There may also be legal requirements for employees who use personal vehicles for work purposes. Business vehicle insurance is probably an essential, regardless of the type of startup.


An important question for business partners to consider is: what would happen if one partner left unexpectedly, was injured, died, or engaged in fraud? Would the business be able to survive the financial consequences? Partnership insurance and public liability insurance will provide protection and may also serve as an important verifier of credibility and respectability.

Employee illness/injury:

Even if the only employees are immediate family, illness or injury could significantly impact a small business in terms of lost time. Keeping employees healthy not only keeps the company open for business, it improves morale and overall health. Disability insurance can provide income if one of the partners is unable to work, and employee health insurance, including basic health and extended plans, helps attract and retain employees.


Liability is perhaps one of the most important areas requiring insurance. What if a client or staff member is injured while on the business premises, or a staff member becomes ill as a result of their work. What if one of the products being sold causes an accidental injury? Perhaps a client record system gets hacked and client identities are compromised. Any professional service a company provides is subject to possible error. Liability insurance will offer protection from an expensive lawsuit. There are different types of liability insurance, depending on individual business needs.

Accounts receivable:

Many startups falter when clients are unable to pay or do not pay on time. Even without a reliable cash flow, business expenses still must be covered. In some cases clients go bankrupt, which can have a serious ripple effect. Accounts receivable insurance can keep a company operational.

While the full spectrum of coverage may not be needed, it’s important for owners of small startups to know what is required and to at least carry basic, essential coverage. Nonexistent or inadequate insurance has contributed to the failure of many startups before they even had a chance to get off the ground.

Call Loftis & Wetzel today at 800-725-3434 and learn about the types of business insurance plans we offer.