The Basics of Business Insurance
What Every New Founder Needs to Know
Business insurance isn’t the most exciting part of starting your company — but it might be the most essential. From unexpected lawsuits to property damage or cyberattacks, the right coverage can literally save your business.
If you're building a startup, launching a freelance brand, selling physical products, or even just growing a newsletter — yes, you might need insurance.
Here’s a simple but complete breakdown of how business insurance works and how to pick the right coverage for your situation.
Why Business Insurance Matters
Imagine this:
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A customer slips in your office.
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A competitor claims you copied their logo.
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Your e-commerce shop gets hacked.
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A shipment of your products gets destroyed.
Each of these events could cost thousands — or even shut down your business. Insurance gives you a financial safety net so you’re not wiped out by one mistake or accident.
Types of Business Insurance (Explained Simply)
1. General Liability Insurance
Protects you from lawsuits involving bodily injury, property damage, or advertising injury.
Ideal for: almost all businesses
2. Professional Liability Insurance (Errors & Omissions)
Covers mistakes or negligence in services (like design, coding, consulting, etc.).
Ideal for: freelancers, consultants, agencies
3. Commercial Property Insurance
Protects buildings, equipment, and inventory in case of fire, theft, vandalism.
Ideal for: product businesses, offices, studios
4. Business Owner’s Policy (BOP)
A bundle of general liability + commercial property. Often cheaper together.
Ideal for: small business owners
5. Cyber Liability Insurance
Protects your business if you suffer a data breach or cyberattack.
Ideal for: e-commerce, SaaS, online businesses
6. Workers’ Compensation Insurance
Covers employees if they’re injured on the job. Often legally required.
Ideal for: teams, even part-time or remote workers
7. Product Liability Insurance
Protects against harm caused by products you sell.
Ideal for: brands, resellers, Amazon FBA, etc.
8. Key Person Insurance
Pays out if a vital team member dies or becomes disabled.
Ideal for: co-founders, small startups
9. Business Interruption Insurance
Covers lost income if your business is temporarily shut down.
Ideal for: physical locations, restaurants, retail
When Do You Need Business Insurance?
If you’re asking, “Do I really need this?” — here’s a quick test:
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Do you interact with clients or customers?
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Do you store data or run a website?
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Do you sell a product?
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Do you rent an office, studio, or warehouse?
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Do you earn enough money that you’d panic if it all disappeared?
If yes to any of the above: yes, you need coverage.
How Much Does It Cost?
Costs depend on:
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Your industry
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Number of employees
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Annual revenue
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Type of coverage
💡 On average:
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Freelancers pay $25–$60/month
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Small e-commerce brands: $50–$200/month
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Tech startups with team: $300+/month
Where to Get It
Here are platforms where you can compare and buy:
Final Advice Before You Buy
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Start simple. Get general liability if unsure.
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Don’t over-insure. Cover the risks that would actually kill your business.
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Bundle policies. You’ll often save 20–30%.
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Reevaluate annually. Your needs grow with your business.
Business insurance protects your brand, assets, and future — often for less than $2 a day. It’s not just a box to tick. It’s how you stay in the game when things go wrong.
Even solopreneurs need it.
Protect your business like it matters — because it does.
