Insurance offers startups a protective barrier from unexpected costs and risks that can damage or threaten to undermine their businesses, often required by clients, investors, and lenders.

Startups can save money on insurance by shopping around for more cost-effective policies, and opting for higher deductibles to lower premiums. Here are some essential types of coverage startups require: 1. General liability and property coverage

1. General Liability

Business insurance can provide essential protection to startups against major setbacks like natural disasters, lawsuits and theft. Furthermore, it demonstrates to clients, investors and partners that you take risk management seriously.

General liability coverage for startups is one of the most vital policies. This covers you if someone gets injured on your premises or your products or services cause property damage to third parties. On average, this costs $42 monthly ($504 annually), yet can save your company from costly out-of-pocket expenses should something go wrong.

Property insurance covers your physical assets against damage from fire and vandalism, making sure that lenders and landlords will allow you to rent space without worry that costly equipment might get stolen. Costs depend on both its value and likelihood, so it is wise to compare different policies until one meets your budget requirements.

2. Business Owner’s Policy (BOP)

If your business has physical assets like equipment and inventory or a physical location, consider investing in a Business Owner’s Policy (BOP) as a form of protection. BOPs combine general liability and commercial property coverage into one convenient package that offers essential protection.

General liability coverage provides protection from claims that your business caused bodily injury or advertising injury to third parties, while commercial property coverage offers coverage against damage to company-owned assets – like fire and theft damage as well as income losses – due to your business activities.

Most small businesses qualify for a BOP policy, including retail shops, contractors, offices, restaurants and wholesalers. You may require additional coverages depending on the risks specific to your industry; some of the coverages that typically don’t come standard include professional liability, workers’ compensation and commercial auto – these may be available as separate add-ons or as part of more comprehensive commercial packages. Typically speaking, companies operating in high-risk industries will pay more due to an increased likelihood of filing claims than businesses operating with lower risks.

3. Employment Practices Liability (EPLI)

With workplace harassment and discrimination at an all-time high, employee lawsuits are on the rise. If your business becomes subject to such litigation, EPLI policies can help mitigate any significant financial losses by covering both defense costs as well as any settlements or judgments made against it.

An EPLI policy reimburses your business for legal costs associated with employment practices claims such as wrongful termination and sexual harassment. While this type of protection typically comes included with BOP and general liability policies, you can also purchase stand-alone policies.

An EPLI policy is an invaluable asset for startups and entrepreneurs who wish to reduce the risk of employment-related lawsuits. Claims against employers can be expensive and time consuming to manage, so having adequate insurance coverage can be invaluable. Many EPLI providers also provide loss prevention programs and access to experienced attorneys that can help mitigate risks and stop potential claims before they even arise. However, an EPLI policy won’t cover you if someone files suit due to professional errors (i.e. malpractice or professional liability claims) or there is an active labor union at your company.

4. Cyber Liability

startups face many risks that could quickly lead to bankruptcy without an appropriate business insurance plan in place. Business insurance acts as a buffer that covers startup expenses while giving founders time and energy for growth.

Some insurers provide bundle policies, or BOPs, which combine general liability and commercial property coverage at a discounted rate. Other coverage options may include product liability (to cover legal expenses if the physical products you sell cause harm or injuries to anyone) and workers’ compensation insurance – both mandatory in most states for businesses employing employees.

Make an inventory of your risk exposures, consider industry requirements, and speak with an experienced insurance broker to secure startup insurance that fits your needs without additional cost. Vouch has designed its service specifically to reduce startup insurance costs while offering instant guidance tailored to each stage and vertical. Get started in minutes; just click here to apply for coverage now – it’s free of charge, plus the first 10 days will be covered free as part of their free policy coverage offer – we have you covered.

5. Directors & Officers (D&O) Insurance

Directors and Officers (D&O) insurance is a form of management liability coverage designed to protect individuals who make decisions with financial ramifications. D&O policies protect them against claims made against them from investors, regulators, employees or competitors for mismanagement, breach of fiduciary duty violations, noncompliance with laws and regulations violations or other matters that arise as a result.

Startups require entrepreneurs and early-stage business leaders to make risky choices that, when they fail, can have serious repercussions for themselves and those they depend on. That’s why D&O insurance coverage should be so integral.

Without D&O coverage, one lawsuit could quickly devastate their savings, home and investments. Companies indemnifying directors and officers against these suits allow them to offload risk when taking on innovative businesses that might incur lawsuits against them – thus offloading risk onto others who can better handle it than themselves. D&O coverage is also often required before investors will invest; as a result D&O insurance should be part of every startup’s toolbox.