Types of Insurance
Types of Insurance startups can buy a la carte
General Liability
What does it cover?
General Liability provides protection against bodily injury and property damage claims for which a business becomes legally liable. The cost of a legal defense if there is a lawsuit is also covered. These types of insurance can usually be packaged into the bundle: Business Owners Property (BOP).
When do you have to have it?
Recommended when you start your business.
Approximate Cost:
Starting at $350/year. Premium will increase as revenues and/or square footage increases. Will also increase as company activities change or you increase limits of coverage.
Time to receive a quote with CoverWallet:
Instantly in most cases.
BOP (General Liability + Property Bundle)
What does it cover?
A Business Owners Policy provides protection against bodily injury and property damage claims resulting from negligent acts for which a business becomes legally liable. This policy can also compensate for loss of income in the event of a fire or another covered loss (flooding isn’t typically covered on a standard BOP/property policy). Defense costs are included in the event of a lawsuit.
When do you have to have it?
Recommend when you start a business and usually required when office space is leased or others contracts are signed.
Approximate Cost:
$425-$2,500+.
Time to receive a quote with CoverWallet:
Instantly.
Professional Liability / Errors & Omissions (E & O)
What does it cover?
Protects you against the financial loss of a customer arising from failure of the insured’s product or service to perform as intended or expected. It also protects financial loss of a third party arising from an act, error, or omission committed in the course of the policy-holder’s performance of services for another. If there is a lawsuit the cost of legal defense is also covered.
When do you have to have it?
Once you launch a product or when a client requests it.
Approximate Cost:
Starts at $500/year ; Usually depends on type of start-up and revenues.
Time to receive a quote with CoverWallet:
Instantly.
Workers’ Compensation
What does it cover?
Provides wage replacement and medical benefits to employees injured in the course of employment. The injury must have its origin at work to be considered a Workers’ Compensation claim.
When do you have to have it?
Once the first employee is hired. Founders do not have to acquire Workers Compensation insurance for themselves although in certain cases Workers Comp is purchased to cover founders and contractors as well.
Approximate Cost:
It depends on payroll and State legislation. It usually costs 1,5%-3% of payroll (unless you operate a risky business like construction), so around $1,000-$2,000 for a few office employees.
Time to receive a quote with CoverWallet:
After submitting the application you get an instant quote. But in some cases an underwritter needs to review and verify the information provided before you can purchase the policy. It can take up to 2 hours and we do it during business hours.
Employment Practices Liability (EPLI)
What does it cover?
Provides protection for the company and executives against claims related to a wrongful termination, harassment, and discrimination claims made by current or former employees. It covers legal defense and potential settlement.
When do you have to have it?
Usually when you close your Series A funding or you have more than 10 employees.
Approximate Cost:
It can be bundled with a BOP policy for ~$200/year.
Time to receive a quote with CoverWallet:
If you buy it as a standalone policy, it can take a few hours. If you bundle it with a BOP policy, you can get it instantly.
Umbrella
What does it cover?
Umbrella insurance provides extra coverage for claims and lawsuits and is often referred to as coverage for excess liability and is useful for covering gaps in coverage.
When do you have to have it?
When your risk needs become more complex and standard insurance limits across basic policies are inadequate.
Approximate Cost:
$400-$1,200 per million of limit depending on cost of underlying coverage.
Time to receive a quote with CoverWallet:
Less than 20 minutes.
Commercial Auto
What does it cover?
Commercial Auto offers coverage for any physical damage to the vehicle you drive for business whether it occurs through theft, weather or a collision. It also provides coverage for third party lawsuit costs associated with accidents, including medical expenses and legal fees. It covers bodily injury, property damage, medical payments, uninsured/underinsured motorist coverage, collision coverage, comprehensive coverage, and roadside assistance.
When do you have to have it?
You’ll need Commercial Auto once you start using a vehicle for business purposes.
Approximate Cost:
$900-$1,200+; primarily depends on the type of vehicle you’re insuring and motor vehicle reports of the drivers being listed on the policy.
Time to receive a quote with CoverWallet:
Usually less than 20 minutes.
Cyber Liability
What does it cover?
Cyberinsurance covers the cost of dealing with a data breach. For example in the US, if a startup’s data is breached, it has to notify all the affected users via certified letters.
When do you have to have it?
Once the startup has client data.
Approximate Cost:
$500-5,000+; Premiums are based on various factors including revenue, and IT security.
Time to receive a quote with CoverWallet:
A few hours.
Special Events
What does it cover?
You, your business and your guests upon unwanted outcomes, especially if there is alcohol involved. Fights, food poisoning (because of allergies), damage of a 3rd party location if you rented it, etc.
When do you have to have it?
If you have a booth at a conference, the organizers will probably require you to have it. If you host a company party at your offices or you rent a venue, we would recommend you to buy a single event policy. The larger the event, the most important it is since more things can go wrong.
Approximate Cost:
It can be as low at $150 per event. If you organize multiple events or attend multiple conferences, you can buy an annual policy for as low as $500/year.
Time to receive a quote with CoverWallet:
If you submit your application during business hours, it can take 2 hours to get a quote.
Disability
What does it cover?
Disability insurance replaces income lost due to injury from a catastrophic accident or illness that lasts beyond 90 days. It replaces 60% of the policyholder's income from the previous year, up until retirement age (65 years old).
When do you have to have it?
Usually once the first employee is hired. Some states make this a requirement.
Approximate Cost:
1%-3% of your annual income.
Time to receive a quote with CoverWallet:
CoverWallet only offers Disability insurance in the state of New York, and it takes less than 20 min to get a quote.
Health Insurance
What does it cover?
Health insurance provides medical benefits for you and/or your family covering medical treatments, diagnostic tests and pharmaceutical services.
When do you have to have it?
As of January 2015, employers with 50 or more full-time employees are required to provide health coverage to employees or pay a tax penalty. If you have below 50 employees, there is no statutory requirement to provide health insurance to your employees.
Approximate Cost:
Varies by state and breadth of coverage selected. The average premiums for businesses with fewer than 200 employees was $6,486 for single coverage and $17,615 for family coverage.*(Kaiser 2017 Employer Health Benefits Survey) Please consult with your benefits broker for more information.
Time to receive a quote with CoverWallet:
CoverWallet does not provide Health Insurance but is partnered with market leaders who can get you a free quote for your business!
Keyman
What does it cover?
Helps with cost to replace expertise after an essential founder’s death.
When do you have to have it?
Once you start making profit, have investors or want to sustain continuation of the startup in case of a founders death. Can be required by investors.
Approximate Cost:
Similar to life insurance cost.
Time to receive a quote with CoverWallet:
If you submit your application during business hours, it can take 2 hours to get an indication. You may need one week to have it live.
Product Liability
What does it cover?
Your product may have manufacturing or design defects, or inadequate labeling, creating third party injury claims (both bodily injury or property damage). The policy covers the cost of legal defense and settlement.
When do you have to have it?
After you have shipped your product to various clients. The basic product liability coverage could be included in the basic general liability policy. Note it mainly applies to tangible products (e.g., you operate an ecommerce site).
Approximate Cost:
It depends on the category.
Time to receive a quote with CoverWallet:
If you submit your application during business hours, it can take 2 hours to get a quote but it will require additional review before you can purchase it.
Directors & Officers (D&O)
What does it cover?
It protects board members and officers who are sued by customers, partners, competitors or regulators over decisions they make for the company. It covers legal defense (i.e. attorneys) costs and potential settlements, that otherwise would need to be paid from the personal pockets. It covers them even if they leave the startup.
When do you have to have it?
Most companies buy it after raising a new round of financing, to comply with a requirement of the term sheet and the investors since they will likely put someone on the board and they want that person to be covered from legal liability.
Approximate Cost:
Under $1K before Series A. $10K+ after Series A.
Time to receive a quote with CoverWallet:

After submitting the application you get a quote estimation (i.e., you know the price). But before you can purchase it and activate the policy, someone at CoverWallet will need to manually verify the information provided and may request from you supporting documentation (e.g., financials).