Do I Need Special Insurance to Start a Business?

When you start a business, there are many things you need to do in order to protect your assets and get the company off the ground in a way that will maximize the chances of success in the future. One of the most important things that you will need to consider is purchasing insurance for the business. business startup

In some cases, you will need special insurance to start a business because the law requires it. For example, if you plan to have any employees who are working with you, then you are required to purchase coverage that protects them. There are also certain types of insurance coverage that you may not be legally obligated to buy but that you may want to purchase anyway in order to protect your personal and company finances. An experienced San Jose business law attorney at the Law Offices of Mike Ross can help you to decide what kinds of insurance you need. Call today to schedule a consultation and learn more.

Do You Need Special Insurance to Start a Business?

Some of the different types of special insurance that you may need to start your business include:

  • Workers’ compensation insurance.  You are required by California law to purchase workers’ compensation insurance for both full time and part-time employees. If you own your own company that you have incorporated and you are the only employee, you also need to buy workers’ compensation insurance or else qualify for a waiver. Workers’ comp provides benefits in case one of your employees gets hurt or sick due to work duties.
  • Unemployment insurance: If your company has employees, you have to register the business and pay unemployment insurance tax. Again, if you have incorporated and you are an employee of your own business, you still need to pay for this insurance even though you aren’t going to fire yourself.
  • Disability insurance. California is one of a small minority of states that requires employers to purchase disability insurance coverage. This is wage-replacement insurance that protects your employees if they are sick or injured for non-work related reasons.
  • Malpractice insurance. Certain professions including lawyers, doctors and accountants have malpractice insurance in case they are sued for breach of professional duty. This provides protection for you in case you or your company is sued by a client who believes you have failed in your obligations to them.
  • Property insurance. If you operate a business that invites clients or customers in, there is a risk that you will be sued if they get hurt on the premises. Property insurance covers liability for any resulting lawsuits. Property insurance can also provide you coverage in case the building you operate in is damaged.

These are just a few of the many different kinds of insurance you may need. The types of special insurance to start a business that are required will vary depending upon your unique situation. For example, your business partners may require you to buy a life insurance policy that names them as the beneficiaries so they can buy out your heirs if you pass away; and your financiers or investors will likely also require various types of insurance to protect their interests. A San Jose business law professional at the Law Offices of Mike Ross will review your situation and advise you on all of the special insurance to start a business that you need.

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