Congratulations on starting a new business! Starting a business comes with plenty of excitement but also a fair share of risks. Whether you’re opening a handyman service, launching a cleaning company, or starting a landscaping crew, one of the smartest moves you can make early on is protecting your business with the right insurance. Business insurance can shield you from financial losses caused by accidents, lawsuits, property damage, or even unexpected interruptions. If you’re new to business ownership, understanding the basics of business insurance will help you set up a strong foundation and give you peace of mind as you grow.
Why Business Insurance Matters for Startups
No matter how careful you are, accidents happen. A customer could slip on a freshly mopped floor, a piece of equipment could get damaged, or a subcontractor could make a costly mistake. Without insurance, you may be responsible for covering the expenses yourself, which can sink a startup. Business insurance helps protect your finances, your reputation, and your long-term growth.
Want a deeper dive into why coverage is essential? Check out our Business Resource Center article: Get Business Insurance to Cover Liabilities and Protect Your Assets.
Types of Business Insurance Every Startup Should Know
Not all businesses need the same coverage. Here are some of the most common options:
- General liability insurance: Covers accidents, injuries, or property damage caused during your work. This is often the first policy startups purchase.
- Commercial property insurance: Protects buildings, tools, and equipment from damage or theft.
- Business owner’s policy (BOP): A bundle of general liability and property insurance, usually at a lower cost.
- Workers’ compensation: Required if you have employees; covers medical bills and lost wages if someone gets hurt on the job.
- Professional liability insurance: Also called errors and omissions (E&O); useful if you provide expert services or advice.
- Commercial auto insurance: Covers company vehicles (and often personal vehicles used for work).
When it comes to insurance, we’ll admit we’re not experts. But we do know the experts at CoverHound have the answers to all your insurance questions. If you’re ready to explore your options, check out CoverHound’s Business Insurance Resources.
How to Choose the Right Business Insurance for Your Startup
To figure out the right coverage, ask yourself:
- Do I work with customers in their homes or businesses?
- Do I use expensive tools or equipment?
- Will I hire employees or subcontractors?
- Do I drive to job sites or use a company vehicle?
For example, a pressure-washing startup may prioritize liability and commercial auto, while a professional organizer might lean on general liability and professional liability coverage.
Shopping for Business Insurance: Tips for Comparing Policies
Once you know what type of business insurance you need, start gathering quotes. Compare:
- Coverage limits: The maximum amount the insurance company will pay for a claim. For example, if your liability policy has a $1 million limit, that’s the cap on what’s covered.
- Deductibles: The amount you pay out of pocket before insurance kicks in. A higher deductible usually lowers your monthly cost but means a larger upfront expense if you file a claim.
- Premium costs: The price you pay (monthly or annually) for your insurance coverage. Balancing affordability with adequate protection is key.
- Exclusions: Situations or events that your policy doesn’t cover. Always read the fine print so you’re not surprised later.
Tip: Don’t just choose the cheapest policy. Make sure it fully protects against the risks most likely to affect your business, like property damage, vehicle accidents, or customer injuries.
Why Work With a Business Insurance Agent or Broker
While it’s possible to shop for business insurance on your own, working with an insurance agent or broker can save you time and ensure you get the right coverage. Here’s why:
- Expert guidance: Agents and brokers understand the details of different policies and can explain the fine print in plain language.
- Industry knowledge: A broker who regularly works with small businesses or home service contractors will know the common risks in your industry and what policies are most important.
- Policy comparisons: Instead of reaching out to multiple providers yourself, a broker can gather and compare options for you.
- Tailored coverage: Every business is different. A good agent can help customize a policy that matches your unique risks, whether you’re a one-person handyman service or a growing cleaning crew with employees.
- Ongoing support: If you ever need to file a claim, having an agent in your corner can make the process smoother.
Think of an insurance agent as part of your support team, just like an accountant or attorney. They help you focus on running your business while making sure you’re covered.
When to Review and Update Your Business Insurance
Your business isn’t static, so your insurance shouldn’t be either. As your company grows and changes, your coverage needs will too. Make it a habit to review your policies at least once a year, or sooner if big changes happen. Situations that may require an update include:
- Hiring employees: If you bring on staff, you’ll likely need workers’ compensation insurance.
- Buying new equipment: Major investments in tools, machinery, or vehicles should be added to your policy.
- Expanding services: Offering new types of work (e.g., adding power washing to a landscaping business) may create new risks that need coverage.
- Moving locations: If you open an office, lease a shop, or store equipment in a new place, your property insurance needs may change.
- Winning bigger contracts: Some clients may require proof of higher coverage limits before they’ll sign a contract with you.
Pro tip: Put a reminder on your business calendar to review your insurance each year, ideally before renewal. That way, you’re never caught off guard and can make adjustments before it’s too late.
Protecting Your Startup With Business Insurance
Getting business insurance might feel like an extra step on top of an already long startup checklist, but it’s one of the most important investments you can make. It helps protect your business from financial setbacks and builds trust with clients who want to know you’re a professional they can rely on.
Running a home services business comes with a lot of moving parts, from protecting your work with the right insurance to managing day-to-day operations. That’s why we created the Business Resource Center: a hub full of guides, tools, and tips to help you start, grow, and lead your business with confidence. Explore the resources and build a stronger foundation for long-term success.
Note: This blog is for informational purposes only and does not constitute legal, tax, or professional advice. Requirements vary by state and industry. For advice specific to your situation, please consult a qualified attorney, insurance professional, or local government agency.
