Insurance coverage is available for every conceivable risk your business
might face. Cost and amount of coverage of policies vary among insurers. You
should discuss your specific business risks and the types of insurance available
with your insurance agent or broker. Your agency can advise you on the exact
types of insurance you should consider purchasing.

General Liability Insurance

Business owners purchase general liability insurance to cover legal hassles
due to accident, injuries and claims of negligence. These policies protect
against payments as the result of bodily injury, property damage, medical
expenses, libel, slander, the cost of defending lawsuits, and settlement bonds
or judgments required during an appeal procedure.

Product Liability Insurance

Companies that manufacture, wholesale, distribute, and retail a product may
be liable for its safety. Product liability insurance protects against financial
loss as a result of a defect product that causes injury or bodily harm. The
amount of insurance you should purchase depends on the products you sell or
manufacture. A clothing store would have far less risk than a small appliance
store, for example.

Professional Liability Insurance

Business owners providing services should consider having professional
liability insurance (also known as errors and omissions
insurance). This type of liability coverage protects your business
against malpractice, errors, and negligence in provision of services to your
customers. Depending on your profession, you may be required by your state
government to carry such a policy. For example, physicians are required to
purchase malpractice insurance as a condition of practicing in certain
states.

Commercial Property Insurance

Property insurance covers everything related to the loss and damage of
company property due to a wide-variety of events such as fire, smoke, wind and
hail storms, civil disobedience and vandalism. The definition of "property" is
broad, and includes lost income, business interruption, buildings, computers,
company papers and money.

Property insurance policies come in two basic forms: (1) all-risk
policies covering a wide-range of incidents and perils except those
noted in the policy; (2) peril-specific policies that cover
losses from only those perils listed in the policy. Examples of peril-specific
policies include fire, flood, crime and business interruption
insurance. All-risk policies generally cover risks faced by the average
small business, while peril-specific policies are usually purchased when there
is high risk of peril in a certain area. Consult your insurance agent or broker
about the type of business property insurance best suited for your small
business.

Home-Based Business Insurance

Contrary to popular belief, homeowners' insurance policies do not generally
cover home-based business losses. Depending on risks to your business, you may
add riders to your homeowners' policy to cover normal business risks such as
property damage. However, homeowners' policies only go so far in covering
home-based businesses and you may need to purchase additional policies to cover
other risks, such as general and professional liability.