Column: Important Insurance Policies for Businesses

03/9/2010

Cost-cutting entrepreneurs should cover their company's assets with the most affordable, necessary types of insurance.

A recent column by The Street pointed to the four types of small business insurance that are helpful regardless of industry. The first of these: workers compensation insurance. This type of insurance is required in all states except Texas and helps cover costs related to injuries or illnesses caused on the job.

Home business insurance is important for entrepreneurs with home-based companies. This covers losses related to the business equipment and must be purchased separately from homeowners insurance, which is usually not enough to cover business-related losses.

"Worse, homeowners can run into trouble filing claims for personal property if they neglect to tell their insurance company that they're also using the home for business purposes," the column said.

Product liability insurance can protect against claims related to a company's product while key person insurance will cover losses if an important individual in the business dies or is incapacitated for a long period. Risky products often result in higher premiums for product liability insurance.

This coverage can be added to a business owner's policy, which compensates for income lost following a disaster. Other types of insurance available to business owners include business auto insurance, professional liability and employment practices liability insurance.

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