If you’re wondering whether your small business needs insurance, the answer is yes

Triumph is not an insurer provider or financial consulting company, and our advice should not be construed as licensed financial recommendations. Verify articles you read on the internet—always. C’mon, that’s first grade stuff.

Ah, insurance—easily the least sexy part of any new adventure (besides maybe taxes—maybe). While it may not be the most exhilarating part of your venture, it’s certainly one of the most important—and one of the most often overlooked. Time and time again we’ve had clients ask us, “do I really need insurance for this new business?” And time and time again our answer is the same: “yes!”

Even if it’s not readily apparent what potential problems might compel you to get insurance, odds are your side-hustle (or main-hustle) fall under at least some sort of liability risks (fancy jargon for someone could find a way to sue you). Regardless of how obscure you think that lawsuit would have to be, we’re confident there is somewhere out there who could find a way to make it happen. Ridiculously litigation has become increasingly common place in recent times, and we don’t anticipate that going away anytime soon. Where there’s a potential check, there’s a way—and people have pretty much turned lawsuits into an art form. We’re honestly kind of impressed. For example:

In 2013, Subway got slapped with a class-action lawsuit claiming it’s famous footlong subs were actually only 11 inches. A very serious issue, obviously. While Subway eventually got the suit dismissed, the company was still stuck holding the bag for over $520,000 in legal fees.

In 2016, a woman in Chicago filed a $5 million class-action lawsuit against Starbucks on the grounds that the company was putting too much ice in its drinks. Yup, you read that correctly.

And of course, who could forget the infamous McDonald’s hot coffee lawsuit that landed the plaintiff a cool $2.9 million dollar check (before appeal) from the burger behemoth? Now, it’s true that there was more going on than initially met the eye in that case, but it’s still a prime example of an unlikely legal situation arising at serious cost to the business. We don’t exactly think McDonald’s woke up that morning worried about the risk of someone spilling their coffee (but, to be fair, we haven’t asked).

Do these sound like crazy scenarios to you? That’s because they are, and even in cases where the business was absolved from wrongdoing, they were still on the hook for all sorts of legal fees. And lawyers are a lot of things, but cheap is not usually one of them.

Now, we also don’t want to freak anyone out unnecessarily. Is it likely that you’ll get hit with one of these lawsuits? Thankfully, no, but remote chance does not mean no chance, and for how reasonably priced insurance options are, we strongly advise looking into at least a base level of coverage for your new adventure. Heck, depending on what state you operate in, it might be required anyway.

As you probably noticed, all the companies in our examples are huge, and with their increased size came an increased legal target on their back. However, small business are certainly not immune to seemingly frivolous (or well-warranted) lawsuits, and should prepare accordingly.

That said, we know first-hand how boring this stuff can get as some members of our team have spent some time in the insurance game. While this is far from an exhaustive study (we may do one later), we wanted to lay out some basics of small business insurance to give you an idea of what to look for without making your eyes glaze over.

I own inventory and have a store

You, my friend, are probably the most aware of your need for insurance. Physical products, with or without a defect, can be become targets for massive lawsuits—sometimes in the strangest of ways. Along with that, there’s always the classic customer slip-and-fall to watch out for, not to mention protecting your own store and merchandise from damage. Thankfully for you, insurance streamlined this sort of basic scenario a long time ago (like a long, long time ago), and getting coverage should be headache free.

If you own this type of business, we suggest looking into a Business Owners Policy (BOP). BOPs, in addition to being extremely fun to say, allow business owners to package liability coverage (protection against getting sued) and property (protect your own stuff) into one nice handy, dandy policy.

Getting bopping (sorry) and compare rates here.

I own some inventory but do not have a store

In the hybrid world of business, plenty of places sell products exclusively online, or at occasional pop-up shops—maybe even in a tent in a parking lot. We love the hustle, but we also want to emphasize that not having a physical location does not absolve you from the need to buy insurance. Tents can be dangerous, man—trust us.

Thankfully, there’s another easy option for adventurers in the e-commerce space: the aptly named “e-commerce” insurance package. This flavor of policy is specially tailored to the needs of online businesses, and you if you end up dishing your product at pop-up shops or an event, we also recommend looking into some “vendor insurance” options.

Ready to get on it? Cool, save yourself some time and start here.

If you’re strictly writing stuff online

Even if you have no physical aspects to your business, we strongly recommend looking into a basic liability (protection against getting sued) coverage. Believe it or not, words are a fairly effective medium for ticking people off, like a lot—enough to get them to sue you.

We usually tell folks to look into the very common and easily obtained Commercial General Liability (CGL) policy. Just make sure to ask and confirm that your particular policy has “defamation coverage,” so you’ll have some protections against lawsuits leveled because of something you wrote or said. With a CGL in hand, hopefully at a very affordable price, you’ll be off to a great start on your new adventure.

Can’t wait to get started? Check out some coverages here.

Thank God that insurance talk is finally over with

If you’ve read any of our previous articles (or looked at our business model), then you know that, at Triumph, we’re all about saving money in the early stages of your adventure. That said, we do not endorse cutting corners, and saving a few bucks by skimping on insurance makes about as much sense as skimping on the glass at an aquarium (the penguins will stage a prison break).

Like we said at the outset, these suggestions are a drop in an obnoxiously large insurance bucket, but they’re generally where we advise clients to begin their search. If you hold your nose and do the right thing with insurance upfront, it can pay dividends for your endeavor down the road—and perhaps even help you avert disaster. And of course, if you have a question about your specific insurance needs, feel free to shoot us a message at Ask Triumph.

As always, feel free to Ask Triumph with any additional questions and consider Supporting the Team.

All views expressed in the article are opinions of the author and should not be misconstrued as professional consulting or legal advice. Users are responsible for verifying all information before taking action, and Triumph Group LLC is not responsible for any outcomes. Pursue subjects at your own risk. Seriously, man. It’s your life.