A lot of startup owners understandably resemble a certain archetype. They are dreamers, thinking up grand ideas. Ideas which are innovative and limitless in scope. In other words, they are not the kind of people to get caught up in what could go wrong.
Unfortunately, things can and do go very wrong. Unprepared startups can be driven under because of something no one thought to protect against. Of course, this includes massive world-changing events, like a global pandemic, which even sank some of the most prepared businesses. But there are many more common occurrences that are perfectly predictable.
This is not to say that you should change the way you think if you are this kind of startup owner. However, you do need to put measures in place to safeguard you in the worst case scenario.
One of these measures is personal liability insurance.
What is personal liability insurance?
Personal liability insurance covers accidents that befall other people. These events happen either on your property, because of your actions, or because of the actions of another person (or even a pet) for whom you are responsible. Click here for more information on what personal liability insurance covers.
There are obviously exceptions to all of the above, when personal liability cover does not apply. The basic idea, however, is that the other party can legally claim damages against you for accidents that are technically your fault, and personal liability cover pays for these damages.
For example, if you accidentally hit someone with your car, your personal liability cover will pay them out, provided they can prove it is your fault (and all the terms and conditions of the policy are met).
Why should you get personal liability insurance as the owner of a new startup?
Personal liability cover for small business owners
Everyone can benefit from personal liability insurance, seeing as we are all prone to mistakes. No matter your best intentions, you might end up causing someone damage you need to pay for. In some cases, claims against you may be granted based on a technicality or loophole, even if you think this is totally unfair.
However, when you are opening a new startup, you have even more impetus to get personal liability insurance. The reason is that you will be dealing with others, whether digitally or in person, and any major accidents can sink your startup entirely due to big payouts and legal bills.
Here are some of the ways in which you are vulnerable as a startup owner.
Accidents In Person
Whether or not you and your employees are dealing with customers in person, there is still room for accidents to happen. Someone driving the company car might hit a pedestrian, for instance.
Companies that are doing physical labor for customers are particularly at risk, as they may be dealing with heavy machinery or equipment that causes damage to them or their property. Your equipment might be too heavy for their driveway and destroy the paving, or a brick may fall from a high platform and hit someone.
Remember, even if it is not technically your fault, the person may be able to claim from you due to a technicality.
Accidents On Your Premises
If your business has a physical presence, accidents that happen to others on your premises can be claimed from you. This can happen even if you have signage claiming non-liability, as that is not always enough to protect you from claims.
The more people visiting your premises, the more risk there is of an accident happening there. Personal liability cover can ensure that paying out damages will not destroy your business.
Preparation does not require negative thinking
The most successful startups generally have owners who looked past everything that could go wrong. If you think up all the possible problems the moment an idea comes to mind, you will never give the idea a chance. Once you have fleshed out your idea, the potential problems may seem irrelevant or even worth it.
However, that does not mean you should ignore what could go wrong. You don’t need to get caught up in negative thinking. All you need is to insure yourself appropriately, so that you are prepared to face down unexpected challenges.