Securing protection for your passion: your business

Just as you may pay for health, auto, home or renter insurance to protect yourself and your property, a variety of insurance coverage is available for businesses of all sizes to offer a cushion in the event of accidents, disasters or legal issues. The type of coverage you choose will depend on your particular business, from the product or service provided to the structure and number of employees.

The have to haves

Under federal regulations, any business with employees is required to obtain certain types of insurance. In general, you can expect to acquire workers’ compensation, unemployment and disability insurance at the very least.

Some states may require additional forms of insurance. Be sure to check with state or county offices to determine if additional coverage is required to operate.

The probably should haves

The U.S. Small Business Administration serves as a resource for business owners and provides valuable information through its business insurance guide. According to the SBA, there are at least six types of insurance products that owners might consider.

First, general liability insurance can apply to any business and provides protection from financial losses from a host of sources, including damage to property, bodily harm and legal challenges, to name a few. If you’re in the business of providing a service to other businesses, you might be asked to provide proof of this insurance before cementing a relationship.

Product liability insurance is geared to entities that manufacture, distribute or sell a product and face the risk of circulating a defective product in the marketplace that causes bodily harm or injury.

If you think you’re in the clear because your business is service-based, think again. You could be open to financial loss due to allegations of malpractice, errors and negligence. In this case, you’ll want to have professional liability insurance to help back you up.

For businesses with significant property — such as a workspace, equipment and inventory, to start — commercial property insurance can help cover losses or damages from events like fire, wind, vandalism or civil disobedience. Be aware that natural disasters are not treated equally. Businesses in areas prone to flooding or earthquakes typically need separate policies for those threats to assure protection.

While running a business out of a home means that most of your property is already covered under homeowners insurance, it may be worthwhile to explore the benefits of home-based business insurance. You might be able to protect some business equipment and score additional liability coverage.

Finally, if juggling various policies seems unwieldy, look into the advantages of a business owner’s policy. Just as many insurance companies bundle personal auto, home and life insurance policies to give a price break, a similar approach is used with business owners. Typical business coverage options will be packaged together, simplifying the purchasing process and often providing some cost savings.

Where to start

Of course, the six options discussed above aren’t exhaustive. The business insurance marketplace offers various other policies that may be of interest. The first step is to consider your business and which risks must be addressed. Then, start researching which policies fit your needs and talk to several licensed agents to gather their recommendations and rates.

You’ll want to do a side-by-side comparison of costs and benefits before making a selection, and once you do, set a calendar reminder to review your insurance needs on an annual basis. Plus, if your business continues to be financially awesome, then that growth may mean adding employees, equipment and locations, which should prompt a review to ensure your coverage remains adequate.