Yes, startup insurance should be in place before the business begins operations, including before the first sale. Liability exposure begins the moment you open for business, meet with clients, hire employees, or use a commercial space. A slip-and-fall during a pre-launch client meeting, property damage to a client's belongings during a pitch, or a CGL claim from a contractor working on your office — all of these can occur before revenue exists.

Startup insurance is commercial insurance for businesses that are just starting out. Many professionals are afraid to start their own business due to all of the risks involved. While you can mitigate plenty of these risks by learning new skills, many of them are completely outside of your control. These are often external factors including natural disasters, frivolous and baseless lawsuits, as well as simple accidents caused by sheer back luck. 

Let’s say a new entrepreneur opens up their own business. There are plenty of things that do serious damage to a business without the owner being at fault. A fire from another unit in their building might spread, a slip and fall could occur on their property, or a third party may blame you for an accident that occurs. In these situations, startup insurance will cover any insured who’s policy includes the specific incident that happens.

There are plenty of situations where startup insurance can save the business. A common situation is if a customer suffers a slip and fall while on the premises, and they hold the company accountable and file a lawsuit. Another example would be property damage to the office due to a disaster, such as a fire starting in the building, leaving a costly repair bill for the owner. An employee may suffer a work-related injury and hold the business owner responsible for putting them in harm's way and not following workplace safety guidelines, potentially costing the owner lots of legal fees. Many of these situations can seriously damage a startup, regardless of whether the business owner is at fault or not. 

An uninsured business is exposed to the full financial risks of these situations. Startup companies are at especially high risk due to usually having small budgets, meaning that potential losses from problems like costly lawsuits are more likely to overwhelm them. Depending on the insurance coverage provided, an insured company might have financial protection against potential business risks like legal expenses, medical expenses, physical damage to property, and other costs depending on the policies covered. An insurance plan will cover you for up to your policy limits for any legal costs, medical costs, and any other costs covered by the insurance company.

Although most types of businesses are not legally required to have business or startup insurance coverage in Ontario, it is recommended that every business owner protect themselves with startup insurance. Any business owner could easily stumble into a wide range of potential liabilities, especially if they are not prepared. For example, a business owner could face many complicated legal issues due to the complex nature of business that might catch them off guard. For example, a dismissed former employee might be able to launch a wrongful termination case against the company, or a client might accuse the business of causing reputational harm. These are situations where a budding entrepreneur might understandably not know all of the ins and outs, leading to them either missing an obscure law that catches up with them, forgetting to read the fine print, or having a competitor take advantage of the entrepreneur's inexperienced nature to win a flimsy legal case on a technicality. Given that unexpected losses can easily overwhelm the small budget that startup owners are stuck with, the level of protection that startup insurance provides is extremely valuable.

There are also plenty of issues out of everyone's control, such as the possibility of a natural disaster or a criminal targeting a business at random might do a lot of damage. Furthermore, many people and businesses will only want to deal with partners and clients who provide proof of insurance to ensure their own protection, further incentivizing business owners to get startup insurance. Startup insurance is a proactive approach designed to give business owners peace of mind that even if they make a drastic mistake or suffer extremely bad luck, their business can survive by being compensated for the financial costs.

While the cost of startup insurance might seem intimidating, you will be happy to know that it is completely possible to lower the insurance cost without scaling back on the amount of coverage that you have. Here is a list of ways in which you can lower the cost of startup insurance without sacrificing your level of coverage.

• Keeping careful records of business procedures showing that you are taking steps to improve risk management. These tasks will vary depending on your industry and the risks involved.
• Showing that you are taking all proper steps to ensure safety in the workplace. This includes increasing the safety of your employees and all others who enter the premises, including clients and customers.
• Increase your deductible to lower the risk to the insurance company.
• Use a Morison Insurance Broker. A Morison Insurance broker can help shop around for the best deal while also looking for opportunities to bundle specific deals together, ensuring you get the best insurance package. Additionally, they will be happy to provide you with advice on continuing to lower your startup insurance premiums. 

It depends on what industry you and your startup are in. Given the sheer amount of industries that exist and the fact that most businesses often cross multiple different industries, it's impossible to provide any definitive answer to if your startup insurance should include industry-specific coverage. As a result, it is best to contact your expert Morison Insurance broker, who will be trained in answering questions specific to your situation. 

No, the moment a vehicle is used for any commercial or business purpose, personal auto insurance does not cover it. This includes using your personal car to visit clients, transport inventory, or make deliveries for your startup. Commercial auto insurance is required for any vehicle used commercially.

No, home insurance covers personal property and personal activities; it does not cover business activities, business equipment, or business liability claims arising from operating a startup from a home office. If you operate your startup from home, you need business insurance coverage for commercial purposes — a Morison broker can advise on the right combination.