Business Insurance Package Policies & How They Benefit Startups

Choosing commercial insurance can be daunting.  You want your company to be properly protected, but you don’t want to break the bank. Luckily, that’s why business insurance package policies exist!

Insurance carriers frequently bundle various coverage types together, providing a cost-effective approach compared to acquiring them individually. This strategy not only keeps expenses in check but also ensures your company receives the essential protection it rightly deserves. In the world of startups and small businesses, where every penny counts, opting for a comprehensive insurance package policy is a savvy move. It acts as a sturdy safety net, ready to catch you in case a single incident triggers losses or legal actions that span across multiple policies. Let’s explore a few scenarios where an insurance package tailored for startups can truly be a lifesaver:

 

General Liability Insurance / Property Insurance

Imagine this scenario: You, a busy startup entrepreneur, inadvertently overlook leaving the heat on in your office over an extended holiday weekend. Upon your return from the well-deserved break, you’re greeted with a devastating sight—a major water pipe burst that has wreaked havoc, damaging your valuable computers, monitors, and causing significant harm to the office’s walls and furniture. To compound the situation, this burst has also resulted in harm to the property of a neighboring tenant, who subsequently approaches you with claims of negligence. In such critical moments, having the right insurance for startups can be a true lifesaver, providing the protection and support you need to navigate unforeseen challenges and liabilities.

A Property Policy covers you for the cost to repair and replace your own office equipment, but does not cover the property of others. General Liability fills that void by covering 3rd party claims brought on by your alleged negligence (like those of the neighboring tenant).  We can often get these 2 coverages packaged together in a “Business Owner’s Policy,” which is usually much more affordable than buying them piecemeal.

 

Errors & Omissions Insurance / Cyber Security Insurance

Your company sells a custom Customer Relationship Management tool.  A glitch caused by a recent update allows valuable user information to fall into the wrong hands. The downtime experienced while repairing the glitch prevents your user’s access to their data, costing them money in the form of lost revenue.  Your users sue for breach of contract due to the malfunction & subsequent loss of revenue.  They also sue for the negligent disclosure of personally identifiable information.  The former would be considered an errors and omissions claim while the latter would be a cyber issue, and we can get these 2 coverages packaged together!

 

Directors & Officers Insurance / Employment Practices Liability Insurance

A former employee and minor shareholder alleges the CEO of a company mismanaged funds and wrongfully terminated her when he replaced her with another candidate with twice the salary and only half of her qualifications for the job.  The mismanagement could be viewed as a fiduciary issue and fall under a directors & officers claim, where wrongful termination would be an employment practices liability issue.

 

In all of these examples, the insured faced significant exposure – exposure that could lead to shutting down the business – had they included just one instead of both coverages from their SaaS business insurance package policy. Often times the coverage that a claim falls under is dependent on the wording of the complaint letter as much as the incident itself, so always be sure to consider business insurance package policies wherever possible to get your business the most bang for your buck.