The top 3 insurance products every new business needs

Starting a new business is an exciting adventure but it comes with inherent risks. Without the right insurance coverage, unforeseen events could lead to financial losses or even force you to shut down. Navigating your business relies on you to be best prepared for all eventualities. Insurance is vital to protect you and your customers. Current challenges include the rise in cybercrime and fraud, employee safety and welfare, and theft and property damage.

Insurance companies offer great products that can offer protection and assistance if such unfortunate events occur. Here are the top 3 products every new business needs

Cyber insurance

Between November 2023 and April 2024, more than 6.8 billion known records were breached in the U.S. Cybercrime was estimated to cost $452.3 billion in 2024. Cybercrime not only has a financial impact; business reputation can also be affected, with customers losing trust in your handling of their data.

Depending on the insurance provider, cyber insurance policies help businesses mitigate losses from cyber-related risks, such as data breaches, hacking, ransomware attacks and other cyber threats. It can cover the cost of getting your systems back up and running if your system is hacked, or data is breached.

Cyber insurance can also offer legal and forensic services to find the source of the breach, advising on any action to take to restore and protect your system. Any data assets that are altered, corrupted, damaged or deleted can be covered by insurance too. If a virus is passed onto a client or customer, this can also be covered.

With assistance from insurance, you can mitigate damage to your company and regain customers' trust if a cyber breach occurs.

Employer’s liability insurance

The U.S. Bureau of Labor Statistics revealed that nearly 2.6 million nonfatal injuries and illnesses were reported by employees in 2023, with 5,283 fatal work injuries. Liberty Mutual’s 2024 Workplace Safety Index estimated that workplace injuries total cost amounted to $58.07 billion.

Business owners can put in place suitable training and safety measures to reduce the risk of injury to employees. However, employer’s liability insurance covers legal costs, settlements and damages if your business is sued by an employee or ex-employee for bodily injury or health issues caused while at work. This can be applied alongside workers compensation (which is mandatory in all states except Texas) that pays medical costs, rehabilitation and part of lost wages.

With your employees’ safety a paramount concern in your business, it is vital that thorough safety training and support is offered.  If the worst does happen, this insurance alongside workers compensation protects your business from any potential damages.

Commercial property insurance

Theft and vandalism are on the rise and businesses are tackling security challenges every day, with the vast majority (90%) of small-business retailers experiencing theft in their stores. Businesses are also at risk of damage from fire, water and other natural disasters. Natural disasters caused $368 billion in damages in 2024 alone. Having suitable insurance protection is vital for businesses to minimize losses and get the necessary support if any damage occurs.

Insurance policies vary, but many insurance providers offer multiple products to tailor to your business. Commercial property insurance can cover any repair and replacement costs for any damages, minimizing company downtime and ensuring operations continue smoothly. Policies typically cover buildings, inventory and equipment.

Some policies require adding office contents insurance to protect you if you experience theft, damage or loss of business equipment. These can cover a range of items including signage, stolen money, electronics, data and business equipment.

Starting a new business is a brilliant venture and to ensure your business can thrive and not come up against damaging losses and damages, choosing the correct insurance policies is vital. Cyber, employer’s liability and commercial property insurances are three of the best policies your business needs. They offer great protection against the current challenges businesses face and ensure unsuspecting events do not throw your business into disarray.

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Janthana Kaenprakhamroy is the founder of insurtech Tapoly. Contact her at [email protected].