Top 5 Insurance Mistakes New Business Owners Make

​Starting a business?

Avoid these 5 common insurance mistakes new business owners make and protect your company from costly risks.

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Don’t Let an Insurance Oversight Put Your Business at Risk
​Starting a new business is exciting—but between branding, building, and bookkeeping, insurance is often an afterthought. That’s a problem, because even small mistakes can expose your company to major financial setbacks.
Here are the top 5 insurance mistakes new business owners make—and how to avoid them.

❌ 1. Choosing the Cheapest Policy Instead of the Right One
When you’re watching cash flow, it’s tempting to go with the lowest quote. But the cheapest policy often comes with:

• Higher deductibles
• Narrower coverage
• Lower liability limits
• More exclusions

Instead, focus on value, not just price. A policy that costs slightly more per month could save you thousands in the long run.

❌ 2. Skipping General Liability Insurance
Some owners assume they don’t need general liability if they work from home, operate online, or have a low-risk business.
The truth? Any business that interacts with clients, customers, or vendors can face lawsuits for:

• Bodily injury
• Property damage
• Defamation or advertising injury

General liability is often the most essential first policy for startups.

❌ 3. Not Getting Workers’ Compensation Early Enough
Even if you only hire a few part-time or contract workers, you may be legally required to carry workers' compensation insurance—especially in Texas, where opting out carries high liability.

Tip: Check state laws and know that misclassifying employees as contractors can trigger penalties and denied claims.

❌ 4. Forgetting Professional Liability (E&O Insurance)
If you offer a service or give advice—consulting, marketing, design, IT—you could be sued if a client believes your work caused them financial harm.

That’s where Errors & Omissions (E&O) insurance comes in.
It protects you from lawsuits over:

• Missed deadlines
• Breach of contract
• Professional mistakes or oversights

❌ 5. Not Reviewing Coverage As the Business Grows
What worked when you were solo may not work when you grow. If you:

• Hire staff
• Lease commercial space
• Launch a new product or service

…your insurance should grow with you. Schedule an annual review with your agent (like Corin Insurance!) to make sure you’re still protected.

🧠 Carriers to Consider for Small Business:

• Progressive Commercial
• Geico For Commercial Auto
• National General
• Foremost (for contractors and small service-based businesses)

At Corin Insurance we'd be happy to guide and review your insurance needs for your new or existing to business to make sure you are properly insured. Reach out for a small business insurance policy review!


Disclaimer: This content is for educational use only and does not guarantee coverage or legal compliance. Speak with a licensed insurance advisor to discuss your specific business needs.