What a Company Needs (Essentials) and Why in the Start-up P

What a Company Needs (Essentials) and Why in the Start-up Phase of Growth – and What They can Expect as They Become Successful

Marc HonorofCostello Insurance Agency, Incmarc@costello-assoc.comwww.costello-assoc.com

MUST HAVES

WORKERS COMP FOR ALL W2 EMPLOYEES: REQUIRED BY LAW

General Liability (GL) required by any landlord: lease will stipulate insurance requirement.

Depending on the nature of your business, there could be another must have, such as products liability, D&O, E&O, etc.

MAY REQUIRE

BUSINESS OWNERS POLICY (BOP) combines two critical business insurance coverages: business property and business liability. With one convenient policy, you're protected against fire, theft, lawsuits and more. In addition, you can purchase optional coverages allowing you to tailor a policy that meets the unique needs of your business, today and as it evolves.

BUSINESS PROPERTY

BUSINESS LIABILITY

LOSS OF INCOME

DATA BREACH

EPLI

NON OWNED AUTO

CRIME

YOU SHOULD HAVE

E&O:

If you have a professional services business, having errors and omissions insurance coverage can be an integral part of protecting your business. Accusations of negligence or the failure to perform your professional services are things that any professional services business can be sued for, even if it hasn't made a mistake. Protects and provides defense if you get sued for a breach of contract.

You should seriously consider this coverage if your business:

provides a professional service.

regularly gives advice.

is required by its clients to have E & O insurance.

PROFESSIONAL E&O/MALPRACTICE

Lawyers, Doctors, and other professional service providers must carry E&O otherwise known as malpractice insurance.

There are specialty coverages for Legal professionals, Financial professionals, Health professionals, etc.

It is important to recognize that your insurance professional works with an insurer who specializes in these areas. Whether or not the premiums are less expensive, the coverage will be tailored to a particular profession, with enhanced coverage for their typical risks.

Not all E&O policies are the same.

D&O: MY FAVORITE

What is D&O and who needs it???

Directors and officers liability Insurance

(often called

D&O

) is

liability insurance

payable to the directors and officers of a company, or to the organization(s) itself, as indemnification (reimbursement) for losses or advancement of defense costs in the event an insured suffers such a loss as a result of a legal action brought for alleged wrongful acts in their capacity as directors and officers. Such coverage can extend to defense costs arising out of criminal and regulatory investigations/trials as well; in fact, often civil and criminal actions are brought against directors/officers simultaneously.

PRODUCT LIABILITY ALSO KNOWN AS PRODUCTS COMPETED OPERATIONS

Protects manufacturers, wholesalers and distributors against exposure to lawsuits by people who may have been injured or suffered other losses because of their product. It provides coverage for the policyholder against claims stemming from products sold, manufactured or distributed.

You would need this if you’re outsourcing mfg. You will be sued…no one will try to chase the off shore

mfg

, other than you!

FINAL THOUGHTS AND QUESTIONS

There are two important points to remember as young or early stage companies:

1. The early you acquire insurance, the less expensive it will be.

2. It’s always easier to get insurance, if you already have insurance.