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Business Insurance Cost For Startups: How Much Is It?

  • Adroit Insurance and Risk
  • May 23, 2022

For a legitimate chance to succeed, whether yours is a startup or an established enterprise, business insurance is essential to safely run your organisation. You are also legally obliged to have some types of insurance to continue operating. But which insurances do you need, which ones do you choose and how much do they cost?

Opting for the right insurance policy can help ensure your employees feel safe working with you, and investors are more likely to see your business as a serious place to put their money. 


Is Insurance Necessary For Startups? 

Whether you’re starting up a hairdressing salon, a dental surgery, a bookshop; you’re a sole trader electrician, or run a professional services business anywhere in Australia, you need business insurance. It’s the bedrock of any business, large or small, and being a startup doesn’t mean you can cut corners on insurance. You need to protect yourself, your staff, clients, customers and the public as well as the building, vehicles and the tools you require for your trade or business. 

It can seem like a daunting prospect, but our expert brokers at Adroit Insurance & Risk are here to help you make the best business insurance decisions at every growth stage from your startup and beyond.

Prices Depend on How Many Covers You Need

The price of your policies will depend on the types of cover you need, the excess, your industry and the number of employees you hire. Other considerations are the past experiences of the directors of your startup company and where your business is located.

At Adroit, our brokers are renowned for finding affordable, adequate quotes for the kind of insurance our clients need and choose to buy, and these from leading insurance companies who allow you to pay by the month.


What Business Insurance Does a Startup Need?

The kind of business insurance coverage a startup needs depends on its business activities and size. All Australian startups will require at least public liability, and tech startups will also require cyber insurance.

Below are just some of the types of business insurance protection that startup business owners should consider.

  • Public liability insurance – this is crucial cover for all Australian businesses.
  • Professional Indemnity Insurance – for any professional firm that provides advice for payment.
  • Commercial Property Insurance – for any business operating from a commercial property.
  • Product liability -can be included in public liability policies to protect you against claims for damages arising from your business products.
  • Commercial vehicle insurance – crucial for your work vehicle or fleet.
  • Cyber insurance – can cover your business when damages occur due to customer data breaches. Coverage is essential for tech startups and established businesses.
  • Management liability insurance – for claims arising from staff relations, discrimination and OH&S.
  • Business insurance pack – a business pack for your startup. 
  • Workers Compensation Insurance – anyone who employs workers must have this insurance coverage by law.

Public Liability Insurance

The price you will pay for public liability insurance and any of the following covers for your startup will depend on several critical factors, including:

  • She scope and nature of your startup business
  • The size of your business and turnover
  • The level of insurance cover needed by your startup
  • The industry your startup is in will affect how much public liability you need, and it will affect your premium and excess.

The usual public liability amounts are either $5m, $10m or $20m. A sole trader usually requires a smaller amount than a business in a risky industry. The $5 million public liability insurance cost for a sole trader, contractors and consultants may begin at $380 annually or $35 per month for office-based startups. But prices vary.

Product Liability Insurance

Product liability insurance is for startups involved in the production, supply of sale of products to the public. It can protect businesses against claims of personal injury or property damage a third party alleges they suffered due to your business’s product. Startups and established businesses should have both product liability and public liability insurance as foundation covers. 

Professional Liability Insurance (Indemnity)

Professional indemnity insurance can protect your startup if you provide advice or service. Your business could be sued if the advice, actions or service you gave a client was negligent, erroneous or contained omissions and directly led to them incurring losses or damage. Costs for this type of insurance will vary with each profession and the risks involved.

Management Liability Insurance 

You will need to protect your startup’s business assets against claims due to alleged management offenses. Management liability insurance protects your assets, including the company balance sheet, and may cover the following:

  • Superannuation Trust liability
  • Directors and officers liability
  • Employment practice liability
  • Employee crime
  • Statutory fines and penalties 

Commercial Property Insurance

Disasters such as fires, storms, floods, and theft damage can strike at any time, so your startup will need commercial property insurance to help your business recover. If you have cutting edge equipment and expensive supplies you need this insurance. A severe event may mean a significant loss of income while you rebuild and restock, but the price of the insurance may be well worth it.  

Commercial Vehicle Insurance

It’s crucial to insure your commercial vehicles, mainly if you use a van or ute, bus or truck as essentials in your startup. Wherever you operate in Victoria or Australia, you need a comprehensive commercial vehicle insurance policy to protect you against property damage either done by your vehicle or to it. Again, costs will vary depending on what you do with your car.

Cyber Liability Insurance

Cyber insurance can cover small businesses or startups against technology-related business interruption, inability to access the internet and emails, viral attacks, data loss etc., due to breaches. Your startup may be vulnerable to downtime and loss of profits if your technology supplier has technical issues or closes its business. 

Cyber attacks can infringe on intellectual property; you may suffer online identity fraud, data theft, system suspension, cyber liability and cyber extortion. Depending on the type of startup you operate, the costs of cyber insurance may differ.

Workers Compensation Insurance

Workers compensation insurance coverage protects employees if they have been injured, become ill or if they die while at work or engaged in work-related activities. WorkSafe Victoria regulates Victoria’s workers’ compensation scheme.

Contact our professional brokers at Adroit Insurance & Risk for all your startup business coverage and quotes, whether it’s for employment practices liability insurance, advice on legal expenses coverage or advice on the average cost of startup insurances. We’re here to help. Phone 03 5221 6644 or email geelong@adroit.com.au.

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