Starting your own small business can be stressful. There are so many things to do and factors to consider, coupled with the looming fear of failure, that make it difficult. Insurance for startups, and freelancers for that matter, should be simple. This should be one thing that is on the checklist for every startup and helps protect their business from day one. This post was written to provide some background information on how to properly protect your startup business or protect yourself if you’re a freelance worker, such as a graphic designer, web developer, branding expert, and more.
Before you buy insurance for your startup you must first file your business with the government and receive your Federal ID Number. This will be needed for quoting your insurance. One very positive thing to note is that many startups receive minimum premium their first year. Since startups don’t have any sales, payroll, or growth history, many insurance companies will give them the minimum premium for the first year they’re in business and adjust it from that point on. Granted, this depends on the type of business being performed but the minimum premium is often as low as $500 per year, and a startup company may have this premium for several years when starting out.
Freelancers have a similar scenario. Whether their business is in their name or in the name of an LLC they will often pay minimum premium for several years while starting out. Freelancers usually just need a general liability policy which you can read about in our other blogs. They usually don’t own a space, have limited business property, and no employees. This means they’re really just concerned with protecting themselves while providing a good or service. This includes product liability and general liability.
As your business grows, you will receive yearly audits by your agent or your insurance company. This will usually be in the form of a questionnaire and ask you to update your gross sales, payroll, and any employees you’ve added to your staff. The larger your business gets, the more liability risks there are associated with your business, and the more the premium rises. We insure many startups and freelancers within the Indianapolis area and throughout the rest of Indiana and the mid west as well. If you’re in the process of starting a business, or if you’re a freelancer who is currently uninsured, please contact us so that we can counsel you on how to best protect yourself and your business.