An Insurance Primer for Founders Of “Revenge Startups”

The clickbait term – revenge startups is making the rounds in news and debates across the country. Following widespread layoffs, various stories are getting published showcasing laid-off employees launching new businesses in the same industry. These revenge startup stories began with Jen Zhu and Sarah Porter, who founded their businesses after they were asked to wrap up their professional journey. Many more people are joining those ranks, but the recent market crash has caused funding issues, causing some launches to be delayed.

According to, over 600 companies have fired approximately 194,189 employees worldwide (at the time of writing) since the start of 2023. These layoffs have happened at the world’s largest brands, demonstrating how even the safest bets are no longer safe. The emergence of revenge startups will only increase because the world requires better solutions, and people are certainly coming up with great ideas, solving people’s problems one step at a time.

However, as these revenge startups will be a small army at the start, it is critical to understand the basic insurance requirements for a small business. This is the most critical point to emphasize at this heated moment because any lawsuit can seriously harm a company’s image as well as its financial condition, especially in the preliminary stage.

Insurance Policies Small Businesses Need

General Liability Insurance

For small businesses, the general liability insurance is a must-have policy. This ensures that any damage at the office’s property to a visitor or damage by the service/product used is covered if a lawsuit is filed. For example, a customer might fall at the premises, or the service might not be as expected by the receiver, resulting in a lawsuit. Small businesses are at risk of losing money as compensation to the complainant in such cases.

Worker’s Compensation Insurance

Because small business employees frequently indulge in multiple operational units, they are more vulnerable to danger if the business operates in risk zones. Workplace incidents can result in bodily harm or illness, which can be either short-term or chronic. As a small business owner, you can pay for any medical bills presented by the employee or pay compensation if they take you to court with the help of worker’s compensation insurance.

Employment Practices Liability Insurance

Although the startup culture is becoming more inclusive and neutral, some employees may experience misogyny, racial discrimination, or worse, sexual dysphoria at the workplace. These triggers can be extremely painful for people, and they may sue your small business for unfair treatment. If an employee is wrongfully terminated without notice, they may sue the company as well. In all these cases, employment practices liability insurance can be an excellent way to protect one’s finances or reputation.

Commercial Property Insurance

A building or property insurance policy for your small business can be the best option in the event of a fire, burglary, theft, or other damaging incidents. Commercial building insurance is an excellent way to safeguard the rented or personal property on which your business operates. This insurance policy covers all equipment losses, property losses, furniture losses, and so on, making it easy for business owners to get back on their feet after a mishap.

Cyber Liability Insurance

According to reports, every other year, small businesses are the top targets of various types of cybercrime. To that end, IBM estimated the average data breach cost in the United States to be $9.44 million in 2022. And unfortunately, because of the size of the business, small business owners do not consider this a major issue to tackle. 

However, due to inadequate security infrastructure, small businesses are the most vulnerable to cybercriminals. Purchasing cyber liability insurance ensures that the company receives assistance in fighting the case and obtaining compensation for any loss of business or sensitive data, as well as the restoration of the lost image.

Commercial Auto Insurance

Commercial auto insurance remains one of the most overlooked insurance policies for any small business owner. If you own a commercial vehicle or a fleet, you must obtain commercial auto insurance. Apart from being involved in an accident, it is useful when your commercial vehicle destroys someone’s property or injures someone. The insurance ensures that all the damage is covered and litigation fees are taken care of.

Business Interruption Insurance

Pandemics, natural disasters, and other unforeseen events have prepared all businesses to face the worst. Business interruptions can transpire at any time due to man-made or natural disasters. Small businesses are the worst hit in such scenarios because their business size is small, and their scaling capacity is limited to one function. So, if operations or sales stop, a business interruption insurance policy can help pay for the lost business or any compensation needed.

Commercial Umbrella Insurance

When no other policy is going to cover your claim, umbrella insurance can come to the rescue. It not only broadens the scope and possibility of other liability insurance, but it also helps in unusual circumstances. These policies include general liability, auto insurance, professional liability, and employer liability, among others. The terms of this policy are heavily influenced by the add-ons chosen and the premium limit required based on the business’s portfolio.

Portfolio assessment based on risk management is a critical task that every small business owner must outsource to a reputable insurance provider. We at Gonzalez Insurance excel not only at conducting a thorough portfolio analysis but also in recommending the best policy with reasonable premium limits. Get in touch with us to get a customized quote for your thriving small business during this revenge startup wave, and leave your insurance worries to us.