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Startup Insurance: Business Insurance Quotes From $5

For your business best protection and savings, we recommend bundling GL with some other important coverages on one Business Owners Policy!


For your business best protection and savings, we recommend bundling GL with some other important coverages on one Business Owners Policy!

One of the hardest stages in running a business is when you’re just starting to pick pace. A startup business can easily lose valuation because of lawsuits, commercial property damage, and other exposures. While it does not guarantee success, getting startup insurance ensures that you have a countermeasure when such things happen. 

What Insurance Do You Need For Your Startup Business?

Regardless of the industry you decide to pick, general liability insurance is always useful. You need to get $300,000-$1 million worth of coverage from this type of startup business insurance. 

You must also consider getting workers' compensation insurance if your startup is employing one or more people. 

In case you’re providing installation, repair, cleaning, consulting, and other services, a professional liability policy must be part of your start up insurance program. 

And if you’re a tech startup whose work involves the collection and processing of customer data, then it’s a good idea to get cyber liability insurance. 


General Liability Insurance for Startups

General liability insurance for startups grants a shield against claims for bodily injury or property damage that third parties file. Here are some situations where this insurance is useful:

  • A customer slips and falls while in the premises of your startup business

  • An employee causes property damage while repairing or installing a product for a client

  • Members of the public get injured or sustain property damage due to an accident that happened in the construction site owned by your startup business


So how much money can startups get from general liability insurance? General liability insurance for startups provides $300,000-$2 million you can use to cover these costs:

  • Medical treatment

  • Reimbursement for property damage

  • Defense costs

  • Court judgments


The general liability insurance in startup business insurance programs is underwritten as a broad-form policy. It provides additional protection such as:

  • $2 million products and completed operations coverage

  • $1 million advertising injury coverage

  • $100,000-$300,000 rented premises liability coverage

  • Non-owned hired auto liability coverage


Your startup business needs to have $1 million general liability insurance to satisfy client contracts and rent equipment or a commercial space. 


Professional Liability Insurance for Startups 

Professional liability insurance is handy if your startup business generates revenues by providing specialized services to clients. This grants protection when a client files a claim and holds your business liable for:

  • Misrepresentation

  • Violation of good faith

  • Violation of fair dealing 

  • Breach of contract

  • Missed deadlines


Startup businesses can get $250,000-$2 million minimum coverage from professional liability insurance. This insurance money can be used to cover settlements, defense costs, and court judgments every time a claim is filed. 

You get professional liability insurance as a claims-made or occurrence form policy. It’s best to get at least $1 million worth of coverage from professional liability insurance. 

Professional liability insurance is usually available on its own. However, there are cases where you can only get professional liability insurance if you include general liability insurance in your startup policy bundle. 

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Directors And Officers Liability Insurance for Startups 

If your startup is operating as a corporation, LLC, or trust,  then it’s good to include a directors and officers liability policy in your insurance plan. 

Directors and officers liability insurance grants protection when a CEO, marketing officer, operating officer, secretary, and other heads of a startup company commits embezzlement, negligent hiring, fraud, misrepresentation, and other dishonest acts. 

You can get $500,000-$5 million from directors and officers liability insurance. Its particular functions can be simplified as follows:

  • Cover defense costs and indemnification to the aggrieved parties on behalf of your startup business’s directors and officers

  • Cover the defense costs and settlements your startup company must pay if it gets involved in the mess created by its directors and officers 

  • Reimburse the losses incurred by the directors, officers, and your startup company as a result of the claim filed by aggrieved parties


In most cases, you use D&O insurance for startups if the directors and officers of your company face a claim filed by creditors, regulatory authorities, shareholders, competitors,  employees, and customers. 


Cyber Liability Insurance for Startups

Cyber liability insurance is important if your startup company processes, gathers and collects the data of clients or users. This is the best business insurance for tech startups involved with app development, web development, and other IT services. 

Exposures covered by cyber liability insurance are phishing, malware, ransomware, man-in-the-middle attacks, and other forms of data breach. 

Cyber liability insurance grants $300,000-$10 million. You can use this insurance money to cover these costs:

  • The ransom demanded by the cybercriminal

  • Public relations expenses

  • Defense costs

  • Professional services for containing the breach

  • Credit and fraud monitoring


Commercial Property Insurance for Startups 

Your startup can insure supplies, offices, warehouses, condos, and other tangible business assets by buying commercial property insurance. 

Startup businesses use commercial property insurance to recover losses if an office, warehouse, condo, or any other building gets damaged or lost because of:

  • Fire

  • Theft 

  • Vandalism

  • Riot

  • Civil commotion

  • Aircraft

  • Vehicle

  • Impact

  • Lightning

  • Volcanic action

  • Sinkhole collapse

  • Rain

  • Hail

  • Winds

  • Snow

  • Sprinkler leakage


Commercial property insurance also grants coverage if stocks, inventory, supplies, or equipment get damaged or lost while inside a building owned by your startup business. 

Sometimes, this insurance is designed comprehensively that it will also provide these additional perks:

  • $5,000-$10,000 for credit card slip or loss

  • $1,500-$2,000 for lock and key damage or loss

  • $5,000-$10,000 for accounts receivable

  • $1,500-$5,000 for any damage to water, electricity, and other utility services 


Business Interruption Insurance for Startups

Your startup business is very vulnerable to income loss as caused by temporary suspension of its operations. This is why it’s good to get business interruption insurance. 

Business interruption insurance helps if you need to close your startup business temporarily because of:

  • Economic crisis

  • Relocation

  • Renovation

  • Other covered perils


It’s easy to understand how this insurance works.  While your startup company isn’t generating income, business interruption insurance supplements lost revenues and provides the money you can use to cover employee payroll, utility bills, mortgage, lease, rent, and other operational costs. 

Business interruption insurance grants coverage for 30 days or 360 days if you decide to get an endorsement. 


Business Owner’s Policy for Startups

Commercial property and general liability insurance are the best insurance for startups. In connection, you can bundle them in a business owner’s policy. 

A business owner’s policy saves you the trouble of buying general liability and commercial property insurance separately. This is the best insurance for startup company looking for quick and comprehensive coverage. 

It might also offer other coverages such as business interruption insurance, employee dishonesty insurance, cyber liability insurance, and more. 


Workers Compensation Insurance for Startups 

As we said earlier,  you need to consider getting workers compensation insurance if your startup business has one or more full-time and part-time employees. 

Workers' compensation insurance is required by law. Authorities can issue a penalty if your startup business doesn’t comply. 

The coverage of workers' compensation insurance applies when a part-time or full-time employee sustains a work-related injury or disease. This will take care of the following costs on your behalf:

  • EMT service fees

  • First aid treatment, surgery, and other expenses for employee’s medical treatment

  • Hospitalization

  • Medication

  • Reimbursement for lost wages

  • Rehabilitation and retraining

  • Funeral expenses and allowance to dependents in case of death


Your startup business’s workers' compensation insurance doesn’t automatically cover independent contractors. Name independent contractors as additional insureds if you wish to include them in your worker's compensation insurance. Doing this might come at an additional cost.


Employer’s Liability Insurance for Startups

Your startup can add an employer’s liability insurance to workers' compensation insurance. 

Sometimes, workers' compensation insurance can automatically have employer’s liability insurance. 

Employer’s liability insurance protects your startup business if an employee holds it liable for negligence because of a work-related injury or disease.  

It grants $100,000-$5 million you can use to cover settlements, defense costs, and court judgments. 

It’s best to get a $1 million-$2 million employer’s liability insurance for your startup business. Doing so provides protection without compromising your budget.


Employment Practices Liability Insurance for Startups 

Occupational injuries or diseases aren’t the only reasons for an employee to hold your startup company liable. The thing is employer’s liability insurance limits itself to such exposure. 

You can also get employment practices liability insurance to cover claims that employer’s liability insurance doesn’t cover, such as:

  • Sexual harassment

  • Discrimination

  • Wrongful termination

  • Exploitation

  • Negligent hiring

  • Failure to promote

  • Other violations of employee rights


Employment practices liability insurance provides $25,000-$1 million to startup businesses. This is only a minimum, and you can get more, provided that your startup business has a good profile.


Commercial Auto Insurance for Startup Businesses 

Commercial auto insurance can be included in your insurance program if your startup business is a trucking company, food delivery company, moving company, and other ventures that utilize commercial vehicles. 

So what does commercial auto insurance do for your startup business? Here’s a summary of its functions:

  • Provide $25,000-$1 million worth of coverage if your commercial vehicle inflicted third parties with bodily injuries

  • Provide $15,000-$1 million worth of coverage if your commercial vehicle caused property damage 

  • Pay parts repair or replacement expenses if your startup’s commercial vehicle got damaged because of a collision, fire, theft , vandalism, and other covered perils

  • Provide $25,000-$50,000 for the medical treatment of the driver and passengers if your startup’s commercial vehicle got involved in an accident that an uninsured/underinsured driver caused

  • Reimburse vehicle rental expenses by up to $30-$90 per day, capped at $900-$1,500 max


Trailer Interchange Insurance for Startups 

Commercial auto insurance isn’t enough if your startup is in the trucking and logistics industry. You might hire or borrow a trailer, and it’s important to get trailer interchange insurance. 

Trailer interchange insurance takes covers the repair or replacement of hired or borrowed trailers under a trailer interchange agreement, which got damaged or lost because of:

  • Fire

  • Theft

  • Malicious mischief

  • Vehicular accidents

  • Operator error

  • Impact

  • Falling objects

  • Winds

  • Water

  • Mechanical breakdown

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Startup Insurance Costs

Each type of insurance for startups has its own pricing. And so, here’s a table outlining the startup insurance costs:


Cost per MonthCost per YearDeductible
General liability insurance$28$336$0-$500
Professional liability insurance$34$408$1,000-$1,500
Directors and officers liability insurance$40$480$1,000
Cyber liability insurance$89$1,068$2,000
Commercial auto insurance$56$672$1,000
Commercial property insurance$39$468$1,500
Workers compensation insurance$90$1,080$2,000


As shown above, expect to pay $28 per month or $336 per year for a $1 million general liability insurance. This is an estimate of the business insurance cost for startup with 5 employees and $500,000-$750,000 revenue per year.

Startup business insurance costs vary and depend on factors such as location, payroll, business history, claims history, annual revenue, type of services or products offered, and more.

Premiums can be also cheap or expensive depending on which insurance company you decide to work with. Here’s another table showing the cost of the recommended carriers for a comprehensive coverage:


Cost per MonthCost per YearBest for
NEXT$24$288Best overall; Fastest general liability insurance for startup businesses
CoverWallet$27$324Startup insurance quotes comparison online
Tivly$29$348Comparing startup insurance quotes over the phone
Thimble$30$360On-demand startup insurance policies
Hiscox$33$396General liability insurance with worldwide coverage for startups
Embroker$40$480Small tech startups who specialize in providing a product or service to a limited audience
Simply Business$42$504Business equipment insurance for startups

Compare Startup Insurance Quotes

Get all the best quotes from leading providers in a click of a button!

Best Startup Insurance Companies

Let’s take a look at the pros, cons, and price of the $1 million general liability coverage of the best startup insurance companies.


NEXT Startup Insurance

Pros

  • Best overall

  • Get an online proof of insurance and send as a text message, email, or social media post

  • Fastest general liability insurance for startups

  • Great customer service and reputation

  • Issues an online proof of insurance instantly

  • Outstanding value for money

  • Bundle two or more insurance policies and get a 10% discount

Cons

  • Couldn’t find any

NEXT offers three levels of coverage for startup companies-basic, premiere, and deluxe. Each is tailored to your business’s unique needs.

For example, if you don’t need a lot of protection, then the basic coverage works best because it only offers a general liability policy. On the flip side, get the deluxe coverage for a comprehensive shield because it offers general liability, professional liability, workers compensation, and other business insurance policies.

Best for: Best overall; Fastest general liability insurance for startup businesses

Average cost: $24 per month

Our rating: 10/10


Coverwallet Startup Insurance

Pros

  • Partnered with AON, a multinational firm with an excellent reputation.

  • Build your own policy based on your startup’s unique needs.

  • Excellent online startup insurance quotes comparison

Cons

  • Coverwallet is online-only, which means that getting in touch may take a little bit longer than with a traditional insurer

Coverwallet is owned by the large multinational insurance conglomerate AON, which provides insurance policies for different businesses.

Policies you can get from CoverWallet are general liability insurance, professional liability insurance, commercial property insurance, workers compensation insurance, commercial auto insurance, and more.

Best for: Startup insurance quotes comparison online

Average cost: $27 per month

Our rating: 10/10


Tivly Startup Insurance

Pros

  • Responsive customer service

  • A partner of many reputable insurance companies

  • Call and compare quotes over the phone

Cons

  • You need to call to get a quote

Tivly (formerly CommercialInsurance.NET) sells general liability insurance, workers compensation insurance, professional liability insurance, bonds, and other insurance products for startups in the fitness industry, design, trucking, and retail industries. Call Tivly now to compare startup insurance quotes over the phone.

Best for: Comparing startup insurance quotes over the phone

Average cost: $29 per month

Our rating: 9/10


Thimble Startup Insurance

Pros

  • Quick to issue an estimate of your rate

  • Sells a short-term general liability insurance

  • Choose limits and deductibles

Cons

  • You can’t reach customer service by calling

Thimble is a great option to get startup business insurance online. Thimble specializes in providing small businesses with on demand general liability insurance policies that grant protection for hours, weeks, days, or months.

Best for: On-demand startup insurance policies

Average cost: $30 per month

Our rating: 8/10

Hiscox Startup Insurance

Pros

  • Worldwide coverage

  • Free claims resources

  • 14-day money-back guarantee

Cons

  • Poor reviews on Better Business Bureau

Hiscox offers general liability insurance, professional liability insurance, cyber liability insurance, and business owner’s policy to startup businesses. This company also sells short-term general liability insurance, which is underwritten by Thimble.

Your general liability insurance from Hiscox has a $300,000-$2 million per occurrence limit. Cyber liability insurance, on the other hand, only has a $300,000 per occurrence limit. Finally, this company’s professional liability insurance grants $1 million-$2 million worth of coverage.

Best for: General liability insurance with worldwide coverage for startups

Average cost: $33 per month

Our rating: 8/10


Embroker Insurance

Pros

  • Cheap insurance rates due to its online-only business model

  • Startup package with a specialization in tech startups

  • Great customer service ratings

Cons

  • No mobile app

Founded by Matt Miller in 2017, Embroker Insurance is one of the few “digitally-native” insurance companies on the market. This means that they don't have any physical offices and handle all of their policies and claims online. This significantly reduces the average cost of insurance paid by policyholders.

Embroker specializes in providing small business insurance and even has a startup policy pre-packaged and ready to go. It includes D&O, employment liability, fiduciary liability, and professional liability coverage with a specialization in tech and cyber-related claims.

Best for: Small tech startups who specialize in providing a product or service to a limited audience

Average cost: $40 per month

Our rating: 8/10


Simply Business Startup Insurance

Pros

  • Issues a gift card you can use to purchase insurance

  • 800,000+ customers

  • A partner of AXA, Zurich, Hiscox, and other reputable insurance companies

  • Has a dedicated team of specialists that grants help if you get dual insured

Cons

  • Not primarily based in the USA

Simply Business is an insurance broker that’s based in the UK. However, it has an office in Boston. Your startup company can get professional liability, general liability, and other business insurance from this company. Note that Simply Business is a partner of Tivly.

Best for: Business equipment insurance for startups

Average cost: $42 per month

Our rating: 8/10




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