Business insurance policies needed for a starting internet business is a wide topic. The type of insurance is going to depend on what you are doing, with whom you do business, the protection you need on your office and equipment, city ordinances and state laws, as well as your personal preference. For our own country, Belgium, there’s a great resource here at VerzekeringHelp.be; but you’ll have to find one specific to your locale if you want to be sure, off course.
Let’s take each scenario separately:
Insurance at your place of business will be required if your online clients come directly to your office. You might have an online catering business but customers come to taste your food or you may have a web design business where clients come to look at samples. Should one of these people fall down or get hit in the head, you need some form of public liability insurance to cover their suits.
Products might require liability insurance, too. Should you manufacture and market a product that could cause bodily harm like a barbecue for instance, you are better with insurance from the beginning than going to court and losing everything. And in the case of that catering business above, serving food to the public is going to require its own type of insurance.
In addition, if you have office space in a building other than your home, you will want to make sure that your equipment is covered in case of theft, vandalism, water, and other problems that might damage your files, both on the computer and in your file cabinets. If your office is in your home, you may need a rider on your home insurance policy to cover the computer, printer, fax machine and other equipment. And if you do not disclose the business to the insurer, you will encounter worse problems when trying to collect on a claim.
Further, if you do expect to replace your paycheck with your online business, you might inquire about “loss of revenue” insurance. What happens if your house or office catch fire and you need to take time off? You need an income while you are rebuilding. Likewise if you become disabled.
Also, if your online business hires physical staff members, you must pay your dues to worker’s compensation, participate in unemployment insurance, and any other employee-required plans in your jurisdiction.
If you are an accountant, IT specialist, or perform another type of consultant work to a company, it might be wise to have professional indemnity so the client cannot accuse you of stealing secrets or other sensitive data.
In cases where you have borrowed the start-up funds from a financial institute, the conditions of the loan may require that you have business life insurance in the event of the death of a key player, and health insurance to ensure that you have the coverage for medical expenses. They will also provide a list of the minimum required coverage for other insurances in order to protect their investment in the business. As the bank wants to be assured of getting their money back, they will demand that you take the necessary steps to safeguard against loss.
Unfortunately, insurance is expensive and the gut reaction in most people is to avoid the issue altogether, saying that they will get insurance later when business is good. But for the reasons outlined above, it is never better to do something after the fact. Your life could be ruined and your online business lost forever because you chose not to obtain the business insurance policies needed for a starting internet business.
Let’s take each scenario separately:
