As others have pointed out there are of course options: multiple accounts, buying safe bonds, etc. But those are all pretty unrealistic for most small businesses. Startups with 3 or 4 people aren't going to spend a lot of time learning all the ins and outs and risks of the options available.
People have pointed out brokers that will shotgun your deposits across many banks to game the deposit insurance limit, and apparently the FDIC is fine with that. But if every employer needs to do this, they can’t vote with their feet anymore, and I’m not sure there’s still a reason for separate banks to exist and compete.
